Cambria Africa Plc
Annual report
2017
Annual Report 2017
Table of Contents
Results for the year
Chief Executive Officer’s Statement
Directors
Statement of Directors’ Responsibilities
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 Position
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Corporate information
Shareholder information
3 to 4
5 to 8
9
9
10 to 13
14 to 16
17
18
19 to 20
21
22
23 to 60
61
62
Cambria Africa plc is a long term, active investment company, building a portfolio of investments primarily in
Zimbabwe. The Company does not have a particular sectoral focus.
Its key objective is building a portfolio of companies that are well-positioned to benefit from Zimbabwe’s
economic growth and from formalization and modernization of Zimbabwe’s economy. Moreover, Cambria
seeks investments that have current sector leadership in Zimbabwe or, in Cambria’s view; will be able to
achieve this.
It has been listed on the AIM market of the London Stock Exchange since 2007. Until February 2012 the
Company was known as LonZim plc.
The Results and their comparatives have been restated to treat the closure of Payserv Zambia as discontinued
operations. Therefore, Payserv Zambia’s losses of $218,000 in FY 2016 and $153,000 in FY 2017 have been
Results for the year
excluded from continuing operations. This has resulted in reporting increased earnings for FY 2016 and FY
2017 from continuing operations.
Paynet Zimbabwe fully utilised its tax-loss carry-forward during FY 2016 and for the first time since dollarisation
in FY 2009 the Company has paid significant corporate taxes. As a result, after tax profits were significantly
impacted by a 66% increase in Group consolidated tax expenses from $397,000 in FY 2016 to $660,000 in FY
2017.
FY 2017 results highlights:
EBITDA from continuing operations nearly doubled,
increasing by 97% to $1,245,000 from $632,000 in FY
2016. This increase included legal costs of $957,000 –
comprising of the Consilium settlement of $223,000 and
associated legal fees of $734,000 (FY 2016: $816,000).
Excluding legal costs, EBITDA increased by 52% or
$750,000 to $2.20 million from $1.45 million in 2016.
All known legal costs associated with the Consilium
Dispute have been accrued in FY 2017 leaving little or
no carryover of associated legal costs to FY 2018.
•
•
•
•
•
Profit before Tax (PBT) increased by $856,000 to
$716,000 from a loss of $140,000 in FY 2016.
Profit after Tax (PAT) found itself in positive territory
reaching $56,000 – a $593,000 increase in profitability
compared to a loss of $537,000 in FY 2016. This increase
in after-tax profitability was achieved despite a 66%
($263,000) increase in taxes to $660,000 from $397,000
in FY 2016
• Borrowings, which include capitalised interest, fell by
$1.02 million (23%) to $3.41 million from $4.43 million
in FY 2016.
Following on from a significant rationalisation and
reduction in 2016 which slashed non-legal central costs
by 86% from $2 million to $280,000, Cambria’s central
costs (excluding legal costs) have stabilised at $311,000.
• Net finance costs were accordingly reduced by $285,000
(44%) to $356,000 from $641,000 in FY 2016. This was
primarily a result of the VAL Loan Conversion and pay
down of the CABS loan by Paynet Zimbabwe.
PAGE 3
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 Results for the year
•
Payserv Africa, Cambria’s largest subsidiary by revenue
and profit, achieved
Subsequent events:
- 20% increase in revenues to $6.37 million,
Subsequent to the end of the financial year notable events
include:
- 35% increase in Consolidated EBITDA to $2.65 million,
Settlement of Consilium Dispute in October 2017.
- 51% increase in profit before tax to $2.43 million,
- 61% increase in profit after tax and after minority
interests of $1.52 million.
• Millchem, following the closure of its unprofitable
subsidiaries in Malawi and Zambia, achieved
- Positive cash flows from operations,
- Significant reductions in overheads,
- EBITDA loss paired by 39% to $143,000 from a loss of
$234,000 in 2016.
Trading update:
The unaudited FY 2018 management accounts for the 4 months
ended 31 December 2017 continue to exceed expectations
compared to the same period in FY 2017:
Payserv:
•
•
•
18% increase in revenues to $2.54 million
71% increase in cash flow to $706,000 from $413,000
23% increase in EBITDA to $1,052,000 from $855,000
Millchem has begun to trade profitably after years of losses:
•
•
•
•
•
$650,000 in revenues - a reduction of 45% to achieve a
more profitable product mix
30% gross profit margin – a nearly two-fold increase
from 16% gross profit margin
$130,000 turnaround in EBITDA to $90,000 from a loss
of $40,000
$123,000 reduction (53%) in administrative expenses
from $230,000 to $107,000
$131,000 turnaround in Profit After Tax to $84,000 from
a loss of $47,000
• Both parties agreed to settle all claims against each
•
•
other;
Cambria paid Consilium $223,000;
The security for costs previously lodged was released
back to Cambria.
Appointment of Sibert Dube as Payserv Zimbabwe CEO.
Mr. Dube identified the following areas of growth for Cambria’s
largest subsidiary by revenue and profit:
•
•
•
•
Entry into the consumer market where its market
share is minimal compared to its commanding position
(90% market share) in the corporate trade and salary
payments;
Providing facilitation services to major players for
distribution of inward international remittances;
Capitalising on distributed ledger and other leading
technologies to enhance its service;
Expanding Tradanet’s payroll-based loan processing to
also include insurance sales and loan origination.
Prospects:
The Company believes that the resignation of President
Robert Mugabe and the inauguration of President Emmerson
Mnangagwa, will result in a favourable business and investment
climate. President Mnangagwa has announced new business-
friendly policies which are intended to attract investment,
protect investment, and bring with it international balance of
payments support. These developments support Cambria’s
focus on Zimbabwe as providing the best
investment
opportunities and returns in the region
Changes to the board:
The board remains unchanged.
About Cambria Africa Plc:
Cambria Africa Plc, quoted on the AIM market of the London
Stock Exchange, is a long term, active investment company,
investing primarily in Southern Africa.
PAGE 4
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
Chief Executive Officer’s Statement
FY 2017 and subsequent systematic and non-systematic events have ushered in a new dawn for Zimbabwe and Cambria.
Introduction:
Since I took over as CEO in August 2015, I have extricated the group companies from loss-making regional operations in Malawi
and Zambia. I have repeatedly expressed my conviction that “Zimbabwe provides the best regional opportunity for successful in-
vestment and growth in the short to medium term.” The performance of Payserv and Millchem are testimony to the soundness of
our investment philosophy.
•
EBITDA from continuing operations have nearly doubled to $1.24 million while PBT increased by $856,000 to $716,000
from a prior year loss of $140,000.
• Despite an increase of 66% in taxes, Cambria achieved an after tax profit of $56,000 – a $593,000 increase in profitability
compared to a loss of $537,000 in FY 2016.
• Cambria settled with Consilium and accrued the cost of that settlement and associated legal fees in FY 2017. There should
be little or no associated costs from this litigation in FY 2018 which should commensurately flow a savings of approximately
$900,000 to Cambria’s bottom line.
•
Excluding legal costs, after slashing central costs by 80% in FY 2016 from $2 million to $280,000, these costs have stabilized
at that level, increasing modestly in FY 2017 to $311,000.
• Debt levels, interest expense, shareholder equity, cash flows, have all improved and have continued to improve subsequent
to end of FY 2017.
Divisional Review
The Payserv Africa continued to achieve record revenues and profits in FY 2017.
Payserv Africa
PAYSERV AFRICA DIVISIONAL RESULTS
US $ ‘000’S
Revenues
Gross profit
Gross margin
Overheads
EBITDA
Profit before interest and tax
Interest
Profit before tax
Minority interest in PBT
PBT (excluding minority interests)
2017
6,370
5,958
94%
(3,310)
2,648
2,499
(71)
2,428
(340)
2,088
Restated
2016
5,319
5,028
95%
(3,066)
1,962
1,855
(250)
1,605
(348)
1,257
Growth
20%
18%
(2%)
8%
35%
35%
72%
51%
(2%)
66%
PAGE 5
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 Chief Executive Officer’s Statement
Paynet Zimbabwe is actively present in, transacting with and
Paynet Zimbabwe
contributing to, the profitability of all financial institutions in
Zimbabwe.
Whilst 80% of Paynet Zimbabwe’s revenue growth in FY 2017
was from existing corporate clients, where Paynet has an esti-
mated market share of 90 - 95%, significant growth opportuni-
ties remain from new initiatives. These include:
•
•
Leveraging our technology and position of trust with
financial institutions into the consumer market where
Paynet’s market share is minimal;
Exploring distributed ledger technologies to enhance
transaction security and reduce transaction costs;
• Developing non-transactional EDI products for the In-
surance and Securities Industries;
•
•
•
Establishing our foothold as a last-mile service provider
to multiple international remittance operations by im-
proving their distribution channels and value addition;
Establishing stronger cost controls on Paynet overheads
to maximize the impact of increases in transaction vol-
ume and minimize the impact of possible reversals in
transaction volume as a result of competition, economi
downturns, or a cut in public sector employment;
Increasing revenues by rationalising transaction pricing
which remains among the lowest in the industry, despite
the commanding market position in our sector.
In line with the closure of Millchem’s unprofitable subsidiaries
Payserv Zambia (discontinued)
in Zambia and Malawi in FY 2016, Payserv Africa closed its un-
profitable Payserv Zambia subsidiary in FY 2017. After years of
losses and unsuccessful bids for contracts and the reversal of
successful bids by various actors, the Board decided if Zambia
cannot sustain a cash flow positive operation it must be discon-
tinued.
This decision was consistent with Cambria’s announced strategy
to focus on Zimbabwe and signaled the end of Cambria’s costly
strategy of regional expansion where the Company had little if
any strategic or competitive advantage. (Continued...)
In line with International Financial Reporting Standards Payserv
Zambia’s performance in FY 2016 and FY 2017 are reflected
separately as a “discontinued operation” and excluded from
the balance of Payserv’s & Cambria’s continuing operations.
This resulted in showing a profit from continuing operations
in FY 2017 and narrowing Cambria’s losses from continuing
operations in FY 2016.
Autopay has not achieved its full potential in the market. Nev-
Autopay Zimbabwe
ertheless, even handicapped by a lack of marketing and inno-
vation, the division has maintained profitability. Payserv will be
preparing segment reporting in the future to better identify the
earning contribution of group company divisions.
Despite standing on Paywell’s robust payroll software, Autopay
has been plagued by declining private sector employment and
increasing numbers of contract workers paid through wallets.
The segments of Autopay consist of 1) full service Payroll Bu-
reau; 2) Software and licensing to major corporates and 3) On-
line SME payroll process.
Autopay is in the process of realigning its strategy to increase its
penetration into the SME market where it is poorly represent-
ed, leveraging its integral relations with Paynet’s payment ser-
vices and Tradanet’s loan services, and the possible acquisition
and development of its supporting software architecture.
Until her resignation on 8 March 2017, Frances Pickering, repre-
Tradanet
senting the minority shareholder of Tradanet with a 49% inter-
est, was the Managing Director of Tradanet, which is Paynet’s
majority-held subsidiary. When Mrs. Pickering resigned as
Managing Director and subsequently as a Director of Tradanet,
Cambria and Paynet took operational control of Tradanet. I was
appointed as the Managing Director in March 2017 and nomi-
nated Manfred Chaniwa, a veteran of the financial industry, to
replace the outgoing general manager in July 2017. Tradanet’s
performance improvements have since accelerated.
There has been a recovery of loan volumes issued from the lows
experienced mainly as a result of the termination of the Cred-
it Partners program in April 2015. Since the reinstatement of
Credit Partners in February 2017 and the introduction of other
new products, particularly Flexicredit, loan volumes have recov-
ered from $119 million in 2016 to $138 million in 2017. The
recovery in volumes can be attributed 73% to Flexicredit, 12%
to CPS and 10% to Retail Credit. Credit partner’s loans currently
represent just 20% of their peak of $30 million in 2014.
PAGE 6
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 Chief Executive Officer’s Statement
Further improvements in loan volumes are expected as the Credit Partner program recovers from its current level of $6,283,000
per annum.
Tradanet also expects to increase its revenues through other new products it has received or is seeking approval from CABS:
•
•
Flexicredit Hybrid – a product directed at employees of larger publicly held corporates which can be evaluated by reliance
on publicly disclosed information;
Insurance Premium Financing;
• Automobile ownership financing.
Following the resignations of Millchem’s Managing Director and Operations Manager, as Cambria’s CEO, I took an active and direct
Millchem Zimbabwe
role in controlling the operations of Millchem and deployed the services of Ambrose Consulting to oversee day-to-day activities
and imports and manufacturing.
MILLCHEM HOLDINGS DIVISIONAL RESULTS
US $ ‘000’S
Revenues
Gross profit
Gross margin
Overheads
EBITDA
Loss before tax
2017
2,228
407
18%
(550)
(143)
(169)
2016
3,193
525
16%
(758)
(233)
(264)
Growth
(30%)
(22%)
11%
(27%)
38%
36%
For the first time in four years, Millchem has recorded an after tax profit in the first four months of FY 2018 ending 31 December
2017. This result was helped in no small part by the cooperation of our bankers who provided the needed remittances to import
raw materials. The results for the first four months of FY 2018 support a sustained recovery of Millchem:
•
•
•
•
•
$650,000 in revenues reduced by 45% to achieve a more profitable product mix,
30% gross profit margin – a nearly 2 fold increase from 16% gross profit margin,
$128,000 turnaround in EBITDA to $90,000 from a loss of $40,000,
$131,000 turnaround in Profit After Tax to $84,000 from a loss of $230,000,
$123,000 reduction (53%) in administrative expenses from $230,000 to $112,000.
The Consilium Dispute was settled in October 2017 subsequent to the financial year-end. However, all the settlement and legal costs
Consilium Dispute
directly associated with the dispute were accounted for in FY 2017. As this was a full and final settlement, Cambria will not be in-
curring any further costs in relation to this matter in FY 2018. With the distraction of a major legal dispute and associated expenses
behind us, we can direct our exclusive focus on investing in the “new Zimbabwe” by exploring organic and acquisitive opportunities.
PAGE 7
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 Chief Executive Officer’s Statement
Cambria’s Directors and Payserv’s Executives have supported
Board of Directors and Compensation
my role as CEO providing direction and management support
without compensation since my appointment in August 2015.
As the ultimate beneficiary of over 65% of Cambria shares, I
continue to serve without compensation. It is my intention that
in FY 2018 we should begin compensating those who have ded-
icated themselves with extraordinary conviction to Cambria.
Proposals for the use of Cambria shares as compensation are
being considered and will be presented in the near future.
•
•
Zimbabwe should seek to join the Southern African
Customs Union (SACU) and the Common Monetary Area
(CMA) which includes its largest trading partner, South
Africa, to bring about investor confidence and align its
economy and competitive advantages with its largest
neighbor while earning customs tariff revenue in a
convertible currency;
Tourism and agricultural are the most promising sectors
for Greenfield foreign
investment given President
Mnangagwa’s policy initiatives.
I expect to continue serving the Company without compensa-
tion in FY 2018.
If Zimbabwe meets the standards of a free, fair, and transparent
election in July, significant international balance of payments
support will be forthcoming.
We believe that the new dispensation will provide a
growing market for our current investments and investment
opportunities which we are uniquely positioned to identify
and act on. Cambria will soon be announcing an Open Offer to
shareholders to capitalise on opportunities for expanding our
current business units in Zimbabwe and the acquisition of new
businesses. An Open Offer will give shareholders the right to
match any debt-equity swaps or new subscriptions on the same
terms and conditions in proportion to their shareholding. It
will also allow shareholders of record to apply for unallocated
shares over and above their own allocation.
SAMIR SHASHA
CHIEF EXECUTIVE OFFICER
26 FEBRUARY 2018
Inauguration of President Emmerson
The most significant and material development for share-
Dambudzo Mnangagwa
holders of Cambria subsequent to the end of FY 2017, was
the
inauguration of Zimbabwe’s new President, Emmer-
son Dambudzo Mnangagwa, on 21 November 2017 follow-
ing the resignation of former President Robert Mugabe.
President Mnangagwa has announced new business-friendly
policies which are intended to attract investment, protect invest-
ment, and bring with it international balance of payments sup-
port. It vindicates management’s focus on Zimbabwe as provid-
ing the best investment opportunities and returns in the region.
During the lead up to the change in government and following the
change, I was interviewed by CNBC Europe, Al Jazeera, and CNBC
Online. In these interviews I expressed my confidence and opti-
mism in Zimbabwe’s future, and made the following salient points:
•
•
•
Positive changes will come but they will not be overnight;
Investors are well-advised to have patience and give the
new government time to visualize and implement sound
economic policies;
Indigenisation laws would be rationalised - These laws
required indigenisation of 51% of ownership in most
industries and they significantly hindered investment.
The President of Zimbabwe has since announced that
this policy will only apply to natural resource based
investments;
PAGE 8
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
Directors
Paul Turner, 71
Paul Turner is a Chartered Accountant and past President
NON-EXECUTIVE CHAIRMAN
of the Institute of Chartered Accountants of Zimbabwe. He
is a highly respected and knowledgeable member of the
Zimbabwean business community. He was a partner at Ernst
& Young in Harare, Zimbabwe, for over thirty years and brings
an unparalleled level of experience in the structure and
operation of businesses in Zimbabwe. Initially appointed to the
Cambria board on 1 July 2008, he was appointed as Chairman
on 8 July 2015.
Samir Shasha, 57
Samir Shasha started his involvement in Southern Africa with
CHIEF EXECUTIVE OFFICER
supplying and leasing trucks for the operations 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 first time. In 2002, S. Shasha & Associates
purchased Zimbabwe Online, an Internet Service Provider in
Zimbabwe, and took on the role of CEO until 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, 37
Josephine Watenphul is a qualified Chartered Accountant
NON-EXECUTIVE DIRECTOR
(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 position which she held until May 2015. During
her tenure at UCS, which was later renamed Capitaleye
Investments upon delisting in October 2011, Josie assisted in
various corporate actions and restructurings. She was appointed
to the Cambria board on 17 June 2015.
Dipak Champaklal Pandya, 59
Dipak Pandya is a Chartered Accountant and has since March
NON-EXECUTIVE DIRECTOR
2009 been the financial controller at Strauss Logistics Limited,
a fuel trading and distribution company active in central and
southern Africa.Prior to this, Dipak was the financial controller
at Playwize Plc, a computer software development company.
Dipak was appointed to the Cambria board on 26 June 2015.
No changes to the board of directors has occurred during the
Changes to the Board
financial period under review and up to the date of this report.
Directors’ Responsibility Statement in
Respect of the Directors’ Report and the
The Directors are responsible for preparing the Directors’ Report
Financial Statements.
and the financial statements in accordance with applicable law
and regulations. The Directors have elected to prepare the
Group and Parent Company financial statements in accordance
with International Financial Reporting Standards as adopted by
the European Union.
The Group and Parent Company financial statements are
required to give a true and fair view of the state of affairs of
the Group and Parent Company and of the profit or loss of the
Group for that period.
In preparing these financial statements, the Directors are
required to:
•
select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent;
•
•
state whether they have been prepared in accordance with
International Financial Reporting Standards as adopted by
the European Union; and
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
and Parent Company will continue in business.
The Directors are responsible for keeping proper accounting
records that are sufficient to show and explain the Group and
Parent Company’s transactions and disclose with reasonable
accuracy at any time its financial position. They have general
responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company’s website. Legislation governing the preparation
and dissemination of financial statements may differ from one
jurisdiction to another.
PAGE 9
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
FOR THE YEAR ENDED 31 AUGUST 2017
The Directors of Cambria Africa Plc (the “Company”) and its subsidiaries (together the “Group”) submit
their report, together with the audited financial statements for the year ended 31 August 2017.
Directors’ Report
During the year, the Group was an investment company with a
Principal activities
portfolio of investments in Zimbabwe.
The Company’s investment objective is to provide Shareholders
Investing policy
with long term capital appreciation.
While the Company does not have a particular sectoral
focus, utilising the investment skills of the Directors and their
advisors, the Company seeks to identify individual companies
in sectors best positioned to benefit should there be radical
improvements in Zimbabwe’s economy. The Company may make
investments in the tourism, accommodation, infrastructure,
transport, commercial and residential property, technology,
communications, manufacturing, retail, services,
leisure,
agricultural and natural resources sectors. The Company may
also make investments in businesses outside Zimbabwe and
the countries surrounding Zimbabwe as well as the remainder
of Sub-Saharan Africa, that have a significant exposure to
assets, businesses or operations within the defined region. The
Company will only be able to achieve its investment objective in
the event the Zimbabwean economy radically improves.
Whilst there will not be any limit on the number or size of
investments the Company can make in any sector, the Directors
seek to diversify the Company’s investments across various
sectors in order to mitigate risk and to avoid concentrating the
portfolio in any single sector.
The Company’s interest in a proposed investment or acquisition
may range from a minority position to full ownership. The
Company intends to actively manage the operations of the
companies it has invested in. Wherever possible the Company
will seek to achieve Board control or financial control of
its portfolio companies.
legislation within
Zimbabwe may, however, prevent the Company from acquiring
or maintaining a majority control in a Zimbabwean business.
Indigenisation
The Directors believe that through their individual and collective
experience of investing and managing acquisitions and disposals
in Africa, they have the necessary skills to manage the Company
and to source deal flow. 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 financial and
legal advisors.
investment strategy
is dependent upon
The Company’s
future radical improvement in the economy of Zimbabwe
and expansion into the immediate region. It is therefore
possible that a significant period of time may elapse before an
investment by the Company will produce any returns and there
is no guarantee that the economy in Zimbabwe will improve.
The Company Directors will comply as a matter of policy with
the US Office of Foreign Assets Control and the European Union
Council Regulation (EC) No. 314/2004 regulations.
consolidated
a
operations
tax,
The Group made
Results
discontinued
of
$97,000 (2016: loss of $744,000) during the year and this has
been set against reserves.
loss
minorities
after
and
The Chief Executive’s review of operations contains information
Business review and development
on developments during the year and key potential future
developments.
The requirements of the enhanced business review in relation
to strategy and progress thereon are contained in the Chief
Executive’s review of operations.
The principal risks and uncertainties relate to the revenue
generation in the Group’s businesses which, being located in
Africa, are subject to respective government policies, political
stability, general economic conditions in the relevant country
and exposure to foreign currency movements.
The Group monitors cash flow as one of its primary key
performance
indicators. Given current global financial
conditions, as well as current developments in Zimbabwe, the
Directors are carefully monitoring cash resources within the
Group and have instigated a number of initiatives to ensure
funding will be available to meet obligations as they fall due
and for planned projects and ongoing working capital support
for its investments.
PAGE 10
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Directors’ Report
Business review and development (con-
If such funding cannot be secured, the projects will be delayed
tinued)
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 different tiers in the operation.
At the top level, the Group tracks revenues, gross profit,
EBITDA and cash generation against budget of the underlying
subsidiaries.
Corporate Governance
COMPLIANCE WITH THE UK CORPORATE GOVER-
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 recommendations
and applicability in respect of the Company insofar as is
practicable and appropriate for a public company of its size and
will continue to implement appropriate compliance measures.
The Directors mitigate risk by evaluation of every investment
that is made and have therefore developed a risk analysis
reporting procedure, which links into the Company’s Corporate
Governance procedures.
information regarding the Group’s policies and
Further
exposure to financial risk can be found in note 29 to the financial
statements.
Details of changes to the Company’s share capital and share
Share capital
premium during the financial year are contained in note 21 to
the financial statements.
Post statement of financial position
Details of significant events since the reporting date are
events
contained in note 35 to the financial statements.
BOARD OF DIRECTORS
At the date of this report the Board of Directors comprises of
one Executive Director, and three Non-Executive Directors, one
of whom is the Chairman.
The Directors are of the opinion that the Board comprises a
suitable balance to enable the recommendations of the Code
to be implemented to an appropriate level. The Board, through
the Chairman and Chief Executive Officer in particular, maintains
regular contact with its advisors, and institutional investors in
order to ensure that the Board develops an understanding of
the views of the major shareholders of the Group.
The Board is responsible for formulating, reviewing and
approving the Group’s strategy, financial activities and
operating performance. Day-to-day management is devolved
to the executive management who are charged with consulting
the Board on all significant financial and operational matters.
Consequently, decisions are made promptly
following
consultation amongst the Directors and managers concerned,
where necessary and appropriate.
All necessary information is supplied to the Directors on a timely
basis to enable them to discharge their duties effectively and all
Directors have access to independent professional advice at the
Company’s expense, as and when required.
is available
The Chairman
institutional
shareholders to discuss any issues and concerns regarding the
Group’s governance. The Non-Executive Directors can also
attend meetings with major shareholders, if requested.
to meet with
The participation of both private and institutional investors at
the Annual General Meeting is welcomed by the Board.
PAGE 11
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Directors’ Report
Corporate Governance (continued)
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 financial information for both internal use and
external publication. Overall control is ensured by a regular
detailed reporting system covering the state of the Group’s
financial affairs. The Board has implemented procedures for
identifying, evaluating and managing the significant risks that
face the Group.
Any system of internal control can provide only reasonable, and
not absolute, assurance that material financial irregularities will
be detected or that the risk of failure to achieve business objec-
tives is eliminated.
COMMITTEES
The Board has established the following committees:
AUDIT COMMITTEE
The role of the Audit Committee is to oversee the nature and
scope of the annual audit, management’s reporting on internal
accounting standards and practices, financial
information
and accounting systems and procedures and the Company’s
financial reporting statements. The Audit Committee’s primary
objectives will include assisting the Directors in meeting
their responsibilities in respect of the Company’s continuous
financial disclosure obligations and overseeing the work of
the Company’s external auditors. The Audit Committee will
comprise Paul Turner (Chairman) and Dipak Pandya.
REMUNERATION COMMITTEE
The Remuneration Committee makes recommendations to the
Board on the remuneration policy that applies to Executive
Directors and senior employees.
The Remuneration Committee will comprise Dipak Pandya
(Chairman) and Paul Turner.
NOMINATION COMMITTEE
The Nomination Committee is responsible for identifying
candidates to fill vacancies on the Board, as and when
they arise, and nominate them for approval by the Board.
The Nomination Committee will comprise Paul Turner
(Chairman), Samir Shasha and Dipak Pandya.
The Directors have been advised of the following shareholdings
Substantial shareholdings
at 16 February 2018 of holding 3 per cent or more of the Com-
pany’s issued share capital:
NUMBER OF
SHARES
PERCENT-
AGE OF
THE ISSUED
CAPITAL
Ventures Africa Ltd*
232,000,000
66.5%
Consilium Investment Man-
agement LLC
20,859,296
5.9%
Russell Investments Ltd
14,252,663
4.0%
* Ventures Africa Limited is beneficially owned by S Shasha, a director and the
CEO of the Company.
Biographical details of all Directors as well as dates of
Directors
appointment and resignation (if applicable) are set out on page
9.
PAGE 12
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Directors’ Report
Between 1 September 2016 and 31 August 2017 the share price
Share price performance
varied between a closing high of 1.75p and a low of 0.60p (2016
high of 1.64p and low of 0.35p). At 31 August 2017 the closing
market price of the shares at close of business was 1.10p (2016:
0.63p). On 31 January 2018 the mid price of the shares was
marked at 1.13p.
A resolution to re-appoint Baker Tilly Isle of Man LLC and
Auditors
to authorise the Directors to fix their remuneration will be
proposed at the Annual General Meeting.
The Directors who held office at the date of approval of this
Directors’ Report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company’s
Auditors are unaware; and each Director has taken all the steps
that he/she ought to have taken as a Director to make himself/
herself aware of any relevant audit information and to establish
that the Company’s Auditors are aware of that information.
ON BEHALF OF THE BOARD.
PAUL TURNER
CHAIRMAN
26 FEBRUARY 2018
The Directors’ who were in office at the beginning and end of
Directors’ share interests
the current financial year, had the following interests in the
shares of the Company:
DIRECTORS
AT
31.08.17
NO. OF
SHARES
AT
31.08.16
NO. OF
SHARES
Samir Shasha*
232,000,000 107,000,000
Josephine Watenphul
Dipak Pandya
Paul Turner
Total
-
-
-
-
-
-
232,000,000 107,000,000
* Held indirectly through Ventures Africa Limited.
All of the above interests are recorded in the Company’s Register
of Directors’ Share and Debenture Interests. No Director has
a beneficial interest in the shares or debentures of any of the
Company’s subsidiary undertakings.
The Company has in place an Anti-Corruption and Bribery
Anti-Corruption and Bribery Policy
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 obligations. The Company’s Chief Executive Officer has
primary and day-to-day responsibility for implementation of the
policy. Management at all levels of the Group are responsible
for ensuring those reporting to them are made aware of,
and understand, the policy. The policy gives guidance on risk
identification and the procedures to follow where a risk is
identified, together with clear guidelines on gifts, entertainment
and donations.
PAGE 13
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Report of the Independent Auditors
responsibilities in accordance with these requirements. We be-
lieve that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Report of the Independent Auditors, Baker Tilly
Isle of Man LLC, to the members of Cambria Africa
Plc
We have audited the financial statements of Cambria Africa
Opinion
Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for
the year ended 31 August 2017 which comprise the Consoli-
dated Income Statement, the Consolidated Statement of Com-
prehensive Income, the Consolidated Statement of Changes in
Equity, the Consolidated and Company Statements of Financial
Positon, the Consolidated Statement of Cash Flows and notes
to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and Interna-
tional Financial Reporting Standards (IFRSs) as adopted by the
European Union.
We have nothing to report in respect of the following matters
Conclusions relating to going concern
in relation to which the ISAs (UK) require us to report to you
where:
the directors’ use of the going concern basis of account-
ing in the preparation of the financial statements is not
appropriate; or
•
This report is made solely to the company’s members, as a
body, in accordance with the terms of our engagement letter
dated 9th January 2018. Our audit work has been undertaken
so that we might state to the company’s members those mat-
ters we are required to state to them in an auditor’s report and
for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than
the company and the company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
In our opinion the financial statements:
•
•
give a true and fair view of the state of the group’s and
of the parent company’s affairs as at 31 August 2017,
and of the group’s loss for the year then ended; and
have been properly prepared in accordance with IFRSs
as adopted by the European Union.
We conducted our audit in accordance with International Stan-
Basis for opinion
dards on Auditing (UK) (ISAs (UK)) and applicable law. Our re-
sponsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial state-
ments section of our report. We are independent of the group
in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the
FRC’s Ethical Standard, and we have fulfilled our other ethical
•
the directors have not disclosed in the financial state-
ments any identified material uncertainties that may
cast significant doubt about the group’s or the parent
company’s ability to continue to adopt the going con-
cern basis of accounting for a period of at least twelve
months from the date when the financial statements
are authorised for issue.
The directors are responsible for the other information. The
Other information
other information comprises the information included in the
annual report, other than the financial statements and our au-
ditor’s report thereon. Our opinion on the financial statements
does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsis-
tent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If
we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is
a material misstatement in the financial statements or a materi-
al misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material mis-
statement of this other information, we are required to report
that fact. We have nothing to report in this regard.
PAGE 14
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Report of the Independent Auditors
Report of the Independent Auditors, Baker Tilly
Isle of Man LLC, to the members of Cambria Africa
Plc (continued)
Matters on which we are required to
In the light of our knowledge and understanding of the group
report by exception
and the parent company and its environment obtained in the
course of the audit, we have not identified material misstate-
ments in the strategic report and the directors’ report.
As part of an audit in accordance with ISAs (UK), we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
•
As explained more fully in the directors’ responsibilities state-
Responsibilities of directors
ment [set out on page 9], the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the prepa-
ration of financial statements that are free from material mis-
statement, whether due to fraud or error.
In preparing the financial statements, the directors are respon-
sible for assessing the group’s and the parent company’s ability
to continue as a going concern, disclosing, as applicable, mat-
ters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of
Our objectives are to obtain reasonable assurance about
the financial statements
whether the financial statements as a whole are free from ma-
terial misstatement, whether due to fraud or error, and to issue
an auditor’s report that includes our opinion. Reasonable as-
surance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always de-
tect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individ-
ually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of
these financial statements.
Identify and assess the risks of material misstatement
of the financial statements, whether due to fraud or er-
ror, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omis-
sions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the pur-
pose of expressing an opinion on the effectiveness of
the group’s internal control.
•
Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the group’s or the parent
company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are re-
quired to draw attention in our auditor’s report to the
related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future
events or conditions may cause the group or the parent
company to cease to continue as a going concern.
PAGE 15
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Report of the Independent Auditors
•
Auditor’s responsibilities for the audit of
Evaluate the overall presentation, structure and content
the financial statements (continued)
of the financial statements, including the disclosures,
and whether the financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business ac-
tivities within the group to express an opinion on the
consolidated financial statements. We are responsible
for the direction, supervision and performance of the
group audit. We remain solely responsible for our audit
opinion.
We communicate with those charged with governance regard-
ing, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant de-
ficiencies in internal control that we identify during our audit.
BAKER TILLY ISLE OF MAN LLC
CHARTERED ACCOUNTANTS
P O BOX 95
2A LORD STREET
DOUGLAS
ISLE OF MAN
IM99 1HP
26 FEBRUARY 2018
PAGE 16
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Consolidated Income Statement
*Restated
Revenue
Cost of sales
Gross profit
Operating costs
Other income
Net profits on disposal of investments and impairment of assets
Operating profit
Finance income
Finance costs
Net finance costs
Profit/(loss) before tax
Income tax
NOTE
5
6
6
8
8
9
Profit/(loss) for the period from continuing operations
Discontinued operations
Loss for the year from discontinued operations, net of tax
5/10
Loss for the year
Attributable to:
Owners of the company
Non-controlling Interests
Loss for the year
Loss per share - all operations
Basic and diluted loss per share (Cents)
Loss per share - continuing operations
Basic and diluted loss per share (Cents)
Loss per share - discontinued operations
Basic and diluted loss per share (Cents)
11
11
11
2017
TOTAL
US$’000
8,598
(2,233)
6,365
(5,307)
23
(9)
1,072
15
(371)
(356)
716
(660)
56
(153)
(97)
(349)
252
(97)
(0.12c)
(0.07c)
(0.05c)
2016
TOTAL
US$’000
8,512
(2,958)
5,554
(5,056)
(2)
5
501
16
(657)
(641)
(140)
(397)
(537)
(207)
(744)
(1 010)
266
(744)
(0.49c)
(0.39c)
(0.10c)
The notes on pages 23 to 60 are an integral part of these consolidated financial statements.
*Amounts have been restated due to the discontinued operations of Payserv Zambia Limited. (See note 2)
PAGE 17
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Consolidated Statement of Comprehensive Income
Loss for the year
Other comprehensive income
Items that will not be reclassified to income statement:
Foreign currency translation differences for overseas operations
Total comprehensive loss for the year
Attributable to:
Owners of the company
Non-controlling interest
Total comprehensive loss for the year
2017
US$’000
(97)
1
(96)
(348)
252
(96)
*Restated
2016
US$’000
(744)
9
(735)
(1 001)
266
(735)
The notes on pages 23 to 60 are an integral part of these consolidated financial statements.
*Amounts have been restated due to the discontinued operations of Payserv Zambia Limited. (See note 2)
PAGE 18
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 Balance at 1 September
2016
(Loss)/profit for the year
Foreign currency translation
differences for overseas
operations - continuing &
discontinued
Total comprehensive profit
for the year
Contributions by and dis-
tributions to owners of the
Company recognised
directly in equity
Issue of ordinary shares
Expiry of share options
Dividends paid
Total contributions by and
distributions to owners of
the Company
Balance at 31 August 2017
-
-
-
17
-
-
17
51
For the year ended 31 August 2017
Consolidated Statement of Changes in Equity
ATTRIBUTABLE TO THE OWNERS OF THE COMPANY
SHARE
CAPITAL
SHARE
PREMIUM
RE-
VALUA-
TION
RESERVE
FOREIGN
EXCHANGE
RESERVE
SHARE
BASED
PAYMENT
RESERVE
RETAINED
EARNINGS
NDR
TOTAL
NON-CON-
TROLLING
INTERESTS
TOTAL
EQUITY
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
34
83,950
438
(10,628)
43
(76,247)
1,900
-
-
-
1,736
-
-
1,736
-
-
-
-
-
-
-
-
1
1
-
-
-
-
-
-
-
-
(43)
-
(43)
(349)
-
(349)
(5)
43
-
38
-
-
-
5
-
-
5
(510)
(349)
(4)
252
(514)
(97)
1
-
1
(348)
252
(96)
1,753
-
-
-
-
1,753
-
(149)
(149)
1,753
(149)
1,604
85,686
438
(10,627)
-
(76,558)
1,905
895
99
994
The notes on pages 23 to 60 are an integral part of these consolidated financial statements.
PAGE 19
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Consolidated Statement of Changes in Equity
ATTRIBUTABLE TO THE OWNERS OF THE COMPANY
*Restated
SHARE
CAPITAL
SHARE
PREMIUM
RE-
VALUA-
TION
RESERVE
FOREIGN
EXCHANGE
RESERVE
SHARE
BASED
PAYMENT
RESERVE
RETAINED
EARNINGS
NDR
TOTAL
NON-CON-
TROLLING
INTERESTS
TOTAL
EQUITY
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
US$’000
34
83,950
438
(10,532)
86
(75,385)
1,900
491
Balance at 1 September
2015
(Loss)/profit for the year
Foreign currency translation
differences for overseas
operations
Total comprehensive profit
for the year
Contributions by and dis-
tributions to owners of the
Company recognised
directly in equity
Disposal of subsidiary
Expiry of share options
Dividends paid
Total contributions by and
distributions to owners of
the Company
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
9
(105)
-
-
(105)
-
-
-
-
(43)
-
(43)
(1,010)
-
(1,010)
105
43
-
148
-
-
-
-
-
-
-
65
266
-
556
(744)
9
(1,010)
9
(1,001)
266
(735)
-
-
-
-
-
-
-
-
(335)
(335)
(335)
(335)
Balance at 31 August 2016
34
83,950
438
(10,628)
43
(76,247)
1,900
(510)
(4)
(514)
The notes on pages 23 to 60 are an integral part of these consolidated financial statements.
*Amounts have been restated due to the discontinued operations of Payserv Zambia Limited. (See note 2)
PAGE 20
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 As at 31 August 2017
Consolidated and Company Statement of Financial Position
*Restated
NOTES
GROUP 2017
COMPANY 2017
GROUP 2016
COMPANY 2016
US$’000
US$’000
US$’000
US$’000
Assets
Property, plant and equipment
Goodwill
Intangible assets
Investment in subsidiaries
Total non-current assets
Inventories
Financial assets at fair value through profit or loss
Trade and other receivables
Cash and cash equivalents
Discontinued operation
Total current assets
Total assets
Equity
Issued share capital
Share premium account
Revaluation reserve
Share based payment reserve
Foreign exchange reserve
Non distributable reserves
Retained losses
Equity attributable to owners of company
Non-controlling interests
Total equity
Liabilities
Loans and borrowing
Provisions
Deferred tax liabilities
Total non-current liabilities
Current tax liabilities
Loans and borrowings
Trade and other payables
Discontinued operation
Total current liabilities
Total liabilities
Total equity and liabilities
12
13
14
15
16
17
18
19
5,10
21
21
20
20,22
20
20
23
24
25
27
23,26
27
5,10
2,727
717
27
-
3,471
233
86
1,730
1,045
29
3,123
6,594
51
85,686
438
-
(10,627)
1,905
(76,558)
895
99
994
1,849
186
184
2,219
397
1,556
1,374
54
3,381
5,600
6,594
-
-
-
-
-
-
-
4,322
143
-
4,465
4,465
51
85,686
-
-
(13,186)
-
(73,243)
(692)
-
(692)
1,565
-
-
1,565
-
926
2,666
-
3,592
5,157
4,465
2,591
717
39
-
3,347
407
40
1,297
698
20
2,462
5,809
34
83,950
438
43
(10,628)
1,900
(76,247)
(510)
(4)
(514)
2,965
193
152
3,310
308
1,469
1,210
26
3,013
6,323
5,809
-
-
-
-
-
-
-
6,374
-
-
6,374
6,374
34
83,950
-
43
(13,186)
-
(71,765)
(924)
-
(924)
2,929
-
-
2,929
-
1,469
2,900
-
4,369
7,298
6,374
These financial statements were approved by the Board of Directors and authorised for issue on 26 February 2018. They were
signed on their behalf by:
MR S SHASHA
EXECUTIVE DIRECTOR
The notes on pages 23 to 60 are an integral part of these consolidated financial statements.
*Amounts have been restated due to the discontinued operations of Payserv Zambia Limited. (See note 2)
PAGE 21
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Consolidated Statement of Cash Flows
NOTES
GROUP 2017
GROUP 2016
US$’000
US$’000
*Restated
Cash generated from operations*
Taxation paid
Cash generated from operating activities
Cash flows from investing activities
Proceeds on disposal of property, plant and equipment
Purchase of property, plant and equipment
Proceeds on disposal of subsidiary
Other investing activities
Interest received
Net cash used in investing activities
Cash flows from financing activities
Dividends paid to non-controlling interests
Interest paid
Proceeds from issue of share capital
Loans repaid
Proceeds from drawdown of loans
Net cash generated/(utilised) by financing activities
Net increase 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 attributable to continuing operations
Cash and cash equivalents attributable to discontinued operations
Net cash and cash equivalents at 31 August
28
23/26
23/26
19
19
960
(539)
421
21
(291)
-
(2)
15
(257)
(149)
(85)
1,753
(2,660)
1,344
203
367
701
1
1,069
1,045
24
1,069
3,944
(313)
3,631
20
(170)
60
(39)
16
(113)
(335)
(267)
-
(7,146)
4,277
(3,471)
47
645
9
701
698
3
701
* All amounts include both continuing and discontinued operations. Cash flows from discontinued operations are set out in note 10, the effect of which were cash
utilised of $55 in 2017 and $235 in 2016.
The notes on pages 23 to 60 are an integral part of these consolidated financial statements.
*Amounts have been restated due to the discontinued operations of Payserv Zambia Limited. (See note 2)
PAGE 22
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
Cambria Africa Plc (the “Company”) is a public limited company listed on the Alternative Investment Market (AIM) and incorpo-
1. Reporting entity
rated in the Isle of Man under the Companies Act 2006. The consolidated financial statements of the Group for the year ended 31
August 2017 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”).
The majority shareholder is Ventures Africa Limited and the ultimate controlling entity is S Shasha and Associates.
The financial statements were authorised for issue by the Directors on 26 February 2018.
2. Basis of preparation
STATEMENT OF COMPLIANCE
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs)
as adopted by the E.U. On publishing the Company statement of financial position here together with the Group financial state-
ments, the Company complies with the Isle of Man Companies Act 2006 under which there is no requirement to present a compa-
ny only statement of comprehensive income in consolidated financial statements.
RESTATEMENT OF COMPARATIVE NUMBERS
During the period, the Group reclassified the operations of the wholly owned subsidiary Payserv Zambia Limited as a discontinued
operation. The board is of the opinion that this business is not going to be successful or profitable and should be discontinued.
Accordingly the information for the prior period has been restated such that comparative information given in respect of discon-
tinued and continuing operations is consistent in each period.
ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)
STANDARDS ADOPTED IN THE CURRENT PERIOD
In the current year, the Group has adopted revised Standards, Amendments and Interpretations issued by the International Ac-
counting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) of the IASB that were
relevant to its operations. The accounting policies adopted are consistent with those of the previous year. New and revised Stan-
dards and Interpretations adopted are summarised next:
PAGE 23
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
STANDARD/ IN-
TERPRETATION
Non-current Assets Held for Sale and Discontinued Operations (Amendments resulting from September 2014 Annual
Improvements to IFRSs)
Financial Instruments: Disclosures (Amendments resulting from September 2014 Annual Improvements to IFRSs)
Consolidated Financial Statements (Amendments regarding the application of the consolidation exception)
Joint Arrangements (Amendments regarding the accounting for acquisitions of an interest in a joint operation)
Disclosure of Interests in Other Entities (Amendments regarding the application of the consolidation exception)
Regulatory Deferral Accounts (Original issue)
Presentation of Financial Statements (Amendments resulting from the disclosure initiative)
Property, Plant and Equipment (Amendments bringing bearer plants into the scope of IAS 16)
Employee Benefits (Amendments resulting from September 2014 Annual Improvements to IFRSs)
Separate Financial Statements (Amendments reinstating the equity method as an accounting option for investments
in in subsidiaries, joint ventures and associates in an entity’s separate financial statements)
EU EFFECTIVE DATE
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2016
Investments in Associates and Joint Ventures (Amendments resulting from May 2008 Annual Improvements to IFRSs)
1 January 2016
Interim Financial Reporting (Amendments resulting from September 2014 Annual Improvements to IFRSs)
1 January 2016
Intangible Assets (Amendments regarding the clarification of acceptable methods of deprecia-tion and amortisation)
1 January 2016
Agriculture (Amendments bringing bearer plants into the scope of IAS 16)
1 January 2016
IFRS 5
IFRS 7
IFRS 10
IFRS 11
IFRS 12
IFRS 14
IAS 1
IAS 16
IAS 19
IAS 27
IAS 28
IAS 34
IAS 38
IAS 41
NEW AND AMENDED STANDARDS EFFECTIVE FOR FUTURE PERIODS
The following standards and interpretations were in issue but not yet effective and were not applied in these financial statements.
STANDARD/IN-
TERPRETATION
IFRS 2
IFRS 3
IFRS 4
IFRS 7
IFRS 9
IFRS 11
IFRS 12
IFRS 15
IFRS 16
IFRS 17
IAS 7
IAS 12
IAS 23
IAS 28
IAS 39
Share-based Payment (Amendments to clarify the classification and measurement of share-based payment transac-
tions)
Business Combinations (Amendments resulting from Annual Improvements 2015–2017 Cycle (remeasurement of
previously held interest))
Insurance Contracts (Amendments regarding the interaction of IFRS 4 and IFRS 9)
Financial Instruments: Disclosures (Amendments resulting from September 2014 Annual Improvements to IFRSs)
Financial Instruments (Amendments regarding prepayment features with negative compensation and modifications of
financial liabilities)
Joint Arrangements (Amendments resulting from Annual Improvements 2015–2017 Cycle (remeasurement of previ-
ously held interest))
Disclosure of Interests in Other Entities (Amendments resulting from Annual Improvements 2014–2016 Cycle (clarify-
ing scope))
Revenue from Contracts with Customers (Original issue)
Leases (Original issue)
Insurance Contracts (Original issue)
Statement of Cash Flows (Amendments as result of the Disclosure initiative)
Income Taxes (Amendments resulting from Annual Improvements 2015–2017 Cycle (income tax consequences of
dividends))
Borrowing Costs (Amendments resulting from Annual Improvements 2015–2017 Cycle (borrowing costs eligible for
capitalisation))
Investments in Associates and Joint Ventures Joint Ventures (Amendments resulting from May 2008 Annual Improve-
ments to IFRSs)
Financial Instruments: Recognition and Measurement (Amendments to permit an entity to elect to continue to apply
the hedge accounting requirements in IAS 39 for a fair value hedge of the interest rate exposure of a portion of a
portfolio of financial assets or financial liabilities when IFRS 9 is applied, and to extend the fair value option to certain
contracts that meet the ‘own use’ scope exception)
EU EFFECTIVE DATE
1 January 2018
1 January 2019
1 January 2018
1 January 2019
1 January 2019
1 January 2019
1 January 2017
1 January 2018
1 January 2019
1 January 2021
1 January 2017
1 January 2017
1 January 2019
1 January 2018
1 January 2019
IAS 40
Investment Property (Amendments to clarify transfers or property to, or from, investment property)
1 January 2018
PAGE 24
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
2. Basis of preparation (continued)
BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on
the historical cost basis except for the following:
USE OF ESTIMATES AND JUDGEMENTS
By their nature, these estimates and assumptions are subject
to an inherent measurement of uncertainty and the effect on
the Group’s financial statements of changes in estimates in
future periods could be significant.
GOING CONCERN
The Group’s business activities and financial performance are
set out in the Chief Executive’s Review on pages 5 to 8. In ad-
dition, note 29 to the financial statements includes the Group’s
objectives, policies and processes for managing its capital;
its financial risk management objectives; details of its finan-
cial instruments and its exposure to credit and liquidity risk.
The Board has considered the cash flow forecasts for the ensuing
12 months including the maturity profile of its contractual debt
obligations. The financial position of the Group has improved sig-
nificantly as a result of the settlement of the Consilium litigation.
Furthermore, as a result of the VAL Loan Conversion and posi-
tive cashflows, external group debt was reduced to $3.41 mil-
lion from $4.43 million at the end of the previous financial year.
After making enquiries, the Directors have a reasonable expecta-
tion that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the annual report and financial statements.
•
•
land and buildings measured at revalued amounts.
share-based payments measured at fair value.
FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated financial statements are presented in United
States Dollars, which is the Group’s presentational currency and
the Company’s functional currency and all amounts have been
rounded to the nearest dollar.
USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with
IFRSs requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions 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 liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision
affects only that period, or in the period of the revision and
future periods if the revision affects both current and future
periods.
Information about critical judgements in applying accounting
policies and assumptions and estimation uncertainties that
have the most significant effect on the amounts recognised in
the consolidated financial statements is included in the follow-
ing notes:
• Note 13 – Goodwill
• Note 12 – Property, plant and equipment
• Note 24 – Provisions
PAGE 25
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
The following accounting policies have been applied consistent-
3. Significant accounting policies
ly by the Group.
(A) BASIS OF CONSOLIDATION
The consolidated financial statements incorporate the financial
statements of the Company and Group entities controlled by
the Company (its subsidiaries). Control is achieved where the
Company is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee. The financial state-
ments of subsidiaries are included in the consolidated financial
statements from the date that control commenced until the
date that control ceases.
The interest of non-controlling shareholders is stated at their
proportion of the fair values of the assets and liabilities 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 deficit balance.
The results of entities acquired or disposed of during the year
are included in the consolidated income statement from the ef-
fective date of acquisition or up to the effective date of dispos-
al as appropriate. Where necessary, the financial statements
of the subsidiaries are adjusted to conform to the Group’s ac-
counting policies. All intra-group transactions, balances, income
and expenses are eliminated on consolidation.
BUSINESS COMBINATIONS
The acquisition of subsidiaries is accounted for using the acqui-
sition method. The cost of the acquisition is measured at the
aggregate of the fair values at the date of exchange of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree.
Acquisition related costs are expensed as incurred unless they
relate to the cost of issuing debt or equity securities. The ac-
quiree’s identifiable assets, liabilities and contingent liabilities
that meet the conditions for recognition under IFRS 3 are rec-
ognised at their fair values at the acquisition date, except for
non-current assets that are classified as held for sale in accor-
dance with IFRS 5, which are recognised and measured at fair
value less costs to sell.
Goodwill arising on acquisition is recognised as an asset at the
date that control is assumed (the acquisition date) and initial-
ly measured at cost, being the excess of the cost of the busi-
ness combination over the Group’s interest in the fair value of
the identifiable assets, liabilities and contingent liabilities rec-
ognised.
If, after reassessment, the Group’s interest in the net fair value
of the acquiree’s identifiable assets, liabilities and contingent
liabilities exceeds the cost of the business combination, the ex-
cess is recognised immediately in the income statement.
The interest of non-controlling shareholders in the acquiree is
initially measured at the non-controlling interests’ proportion
of the net fair value of the assets, liabilities and contingent lia-
bilities recognised.
(B) INTANGIBLE ASSETS
GOODWILL
Goodwill arising on consolidation is recognised as an asset.
Following initial recognition, goodwill is subject to impairment
reviews, at least annually, and measured at cost less accumulat-
ed impairment losses. The recoverable amount is estimated at
each reporting date.
Any impairment loss is recognised immediately in the income
statement and is not subsequently reversed when the carrying
amount of the asset exceeds its recoverable amount.
Any impairment losses recognised in respect of cash generating
units are allocated first to reduce the carrying amount of any
goodwill allocated to cash-generating units (groups of units)
and then to reduce the carrying amount of other assets in the
unit (groups of units) on a pro rata basis.
On disposal of a subsidiary the attributable amount of goodwill
is included in the determination of the gain or loss on disposal.
OTHER INTANGIBLE ASSETS
Other intangible assets are measured initially at cost and are
amortised on a straight-line basis over their estimated useful
lives. The carrying amount is reduced by any provision for im-
pairment where necessary.
On a business combination, as well as recording separable in-
tangible assets already recognised in the statement of financial
position of the acquired entity at their fair value, identifiable
intangible assets that are separable or arise from contractual or
other legal rights are also included in the acquisition statement
of financial position at fair value.
PAGE 26
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 3. Significant accounting policies
(continued)
(B) INTANGIBLE ASSETS (CONTINUED)
Amortisation of intangible assets, disclosed under operating
costs and in note 6, is charged over their useful economic life,
as follows:-
Software licences
3 years
For the year ended 31 August 2017
Notes to the Financial Statements
etary items, any exchange component of that gain or loss is also
recognised directly in other comprehensive income.
For the purpose of presenting consolidated financial state-
ments, the assets and liabilities of the Group’s foreign opera-
tions are translated at exchange rates prevailing at the report-
ing date. Income and expenses are translated at the average
exchange rates for the period, unless exchange rates fluctuate
so as to have a material impact on the financial statements
during that period, in which case the exchange rates at the date
of transactions are used.
(C) FOREIGN CURRENCIES
The individual financial statements of each Group entity are
presented in the currency of the primary economic environ-
ment in which it operates (its functional currency).
Exchange differences arising, if any, are recognised in other
comprehensive income and are transferred to the Group’s for-
eign currency translation reserve within equity.
For the purpose of the consolidated financial statements, the
results and financial position of each of the Group entities are
expressed in United States Dollars, which is the functional cur-
rency of the Company, and the presentational currency for the
consolidated financial statements.
In preparing the financial statements of the individual Group
entities, transactions denominated in foreign currencies are
translated into the respective functional currency of the Group
entities using the exchange rates prevailing at the dates of
transactions.
Non-monetary assets and liabilities are translated at the histor-
ic rate. Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the
rates of exchange ruling at the reporting date. Non-monetary
assets and liabilities denominated in foreign currencies that are
measured at fair value are retranslated to the functional cur-
rency at the exchange rate at the date that the fair value was
determined.
Exchange differences arising on the settlement of monetary
items, and on the retranslation of monetary items, are included
in the income statement for the year, as either finance income
or finance costs depending on whether foreign currency move-
ments are in a net gain or net loss position.
Exchange differences arising on the retranslation of non-mone-
tary items earned at fair value are included within the income
statement for the period except for differences arising on the
retranslation of non-monetary items in respect of which gains
and losses are recognised directly in equity. For such non-mon
(D) TAXATION
The tax expense represents the sum of current and deferred
tax.
CURRENT TAXATION
Current tax is based on taxable profit for the period for the
Group. Taxable profit differs from net profit in the income state-
ment because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The Group’s liability
for current tax is calculated using tax rates that have been en-
acted or substantively enacted by the reporting date.
DEFERRED TAXATION
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabili-
ties in the financial statements and the corresponding tax bases
used in the computation of taxable profit, and is accounted for
using the balance sheet liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets
and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than
in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting
profit.
PAGE 27
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
3. Significant accounting policies
(continued)
(D) TAXATION (CONTINUED)
Deferred tax liabilities are recognised for taxable temporary dif-
ferences arising on the investments in subsidiaries and associ-
ates, except where the Group is able to control the reversal of
the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
previously recognised as an expense, in which case the increase is
credited to the income statement to the extent of the decrease
previously charged. A decrease in carrying amount arising on
the revaluation of such asset is charged as an expense to the
extent that it exceeds the balance, if any, held in the revaluation
reserve relating to a previous revaluation of that asset. Depre-
ciation on revalued assets is charged to the income statement.
On subsequent sale or retirement of a revalued asset, the at-
tributable revaluation surplus remaining is transferred directly
to retained earnings.
The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Depreciation is charged straight line so as to write off the cost
or valuation of assets, other than land and buildings, over their
estimated useful lives. The annual depreciation rates used for
this purpose are:
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is re-
alised. Deferred tax is charged or credited in the income state-
ment, except when it relates to items charged or credited to eq-
uity, in which case the deferred tax is also dealt with in equity.
Freehold buildings
Plant and machinery
Motor vehicles
2%
10%
25%
Deferred tax assets and liabilities are off set when there is a
legally enforceable right to set off current tax assets against
current tax liabilities, when they relate to income taxes levied
by the same taxation authority and the Group intends to settle
its current tax assets and liabilities on a net basis.
(E) INVESTMENTS IN SUBSIDIARIES
Investments in subsidiary undertakings are carried at cost with
annual reviews undertaken for impairment.
(F) OTHER INVESTMENTS
Other asset investments are stated at fair value, adjusted for
impairment losses.
(G) PROPERTY, PLANT AND EQUIPMENT
Land and buildings are stated at their revalued amounts, being
the fair value at the date of revaluation, less any impairment
losses. Revaluations are performed with sufficient regularity
such that the carrying amount does not differ materially from
that which would be determined using fair values at the report-
ing date.
Any revaluation increase arising on the revaluation of such
assets is credited to the revaluation reserve, except to the ex-
tent that it reverses a revaluation decrease for the same asset
Fixtures and fittings
10% - 15%
The gain or loss arising on the disposal of an asset is determined
as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the income statement
for the year.
Assets held under finance leases are depreciated over their ex-
pected useful lives on the same basis as owned assets, or where
shorter, over the relevant lease term. No depreciation is provid-
ed on land and buildings.
Property, plant and equipment identified for disposal are reclas-
sified as assets held for resale.
(H) IMPAIRMENT OF ASSETS EXCLUDING GOODWILL
At each reporting date, the Group reviews the carrying amounts
of its tangible and intangible assets to determine whether there
is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of any im-
pairment loss. Where the asset does not generate cash flows
that are independent from other assets, the Group estimates
the recoverable amount of the cash-generating unit to which
PAGE 28
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
3. Significant accounting policies
(continued)
(H) IMPAIRMENT OF ASSETS EXCLUDING GOODWILL
(CONTINUED)
the asset belongs. Recoverable amount is the higher of fair val-
ue less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market
assessments of the time value and the risks specific to the as-
set for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an
expense immediately, unless the relevant asset is carried at a
revalued amount in which case the reversal of the impairment
loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the in-
creased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior
years. A reversal of an impairment loss is recognised as income
immediately, unless the relevant asset is carried at a revalued
amount, in which case the reversal of the impairment loss is
treated as a revaluation increase.
that are repayable on demand and form an integral part of the
Group’s cash management are included as a component of cash
and cash equivalents for the purpose of the statement of cash
flows.
TRADE RECEIVABLES
Trade receivables are initially measured at fair value and are
subsequently measured at amortised cost using the effective
interest rate method. Appropriate allowances for estimated re-
coverable amounts are recognised in profit or loss when there
is objective evidence the asset is impaired.
TRADE PAYABLES
Trade payables are initially measured at fair value and are sub-
sequently measured at amortised cost using the effective inter-
est rate method.
FINANCIAL LIABILITIES
Financial liabilities are classified according to the substance of
the contractual arrangements entered into.
CAPITAL MANAGEMENT
The new Board’s objective, 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 confidence and to sus-
tain future development of the business.
(I) FINANCIAL INSTRUMENTS
Non-derivative financial instruments comprise investments in
equity, trade and other receivables, cash and cash equivalents,
loans and borrowings and trade and other payables. Financial
assets and financial liabilities are recognised in the Group’s
statement of financial position when the Group becomes a par-
ty to the contractual provisions of the instrument.
BANK BORROWINGS
Interest bearing bank loans and overdrafts are recorded at the
proceeds received, net of direct issue costs. Finance charges, in-
cluding premiums payable on settlement or redemption and di-
rect issue costs, are accounted for on an amortised cost basis to
the income statement using the effective interest method and
are added to the carrying amount of the instrument to the ex-
tent that they are not settled in the period in which they arise.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand and demand
deposits and other short term highly liquid investments that
are readily convertible to a known amount of cash and are sub-
ject to an insignificant risk of changes in value. Bank overdrafts
EQUITY INSTRUMENTS
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
PAGE 29
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
3. Significant accounting policies
(continued)
(J) INVENTORIES
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and where applicable di-
rect expenditure and attributable overheads that have been in-
curred in bringing the inventories to their present location and
condition. Net realisable value represents the estimated selling
price less all estimated costs of completion and costs to be in-
curred in marketing, selling and distribution.
(K) SHARE BASED PAYMENTS
The Group provides benefits to certain employees (including
senior executives) of the Group in the form of share based
payments, whereby employees render services in exchange
for shares or rights over shares (equity-settled transactions).
The cost of these equity-settled transactions with employees is
measured by reference to the fair value of the equity instru-
ments at the date at which they are granted. The fair value is
determined by using a Black-Scholes model. The dilutive effect,
if any, of outstanding options is reflected as additional share di-
lution in the computation of earnings per share.
The grant date fair value of options granted to employees is rec-
ognised as an employee expense with a corresponding increase
in equity over the period the employees become uncondition-
ally entitled to the options.
(L) INTEREST-BEARING BORROWINGS
Interest-bearing borrowings are recognised initially at fair value
less attributable transaction costs. Subsequent to initial recog-
nition, interest-bearing borrowings are stated at amortised cost
with any difference between cost and redemption value being
recognised in the income statement over the period of the bor-
rowings on an effective interest basis.
(M) PROVISIONS
A provision is recognised in the statement of financial position
when the Group has a present legal or constructive obligation
as a result of a past event and it is probable that an outflow of
economic benefits will be required to settle the obligation. If
the effect is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
(N) REVENUE RECOGNITION
Revenue is derived from the sale of goods and services and is
measured at the fair value of consideration received or receiv-
able after deducting discounts, volume rebates, value-added
tax and other sales taxes. A sale of goods and services is rec-
ognised when recovery of the consideration is probable, there
is no continuing management involvement with the goods and
services and the amount of revenue can be measured reliably.
A sale of goods is recognised when the significant risks and re-
wards of ownership have passed to the buyer, the associated
costs and possible return of goods can be estimated reliably.
This is when title and insurance risk have passed to the custom-
er and the goods have been delivered to a contractually agreed
location. A sale of services is recognised when the service has
been rendered.
(O) LEASES
Leases are classified according to the substance of the transac-
tion. A lease that transfers substantially all the risks and rewards
of ownership to the lessee is classified as a finance lease. All
other leases are classified as operating leases.
FINANCE LEASES
Finance leases are capitalised at their fair value or, if lower, at
the present value of the minimum lease payments, each deter-
mined at the inception of the lease. The corresponding liabili-
ty is shown as a finance lease obligation to the lessor. Leasing
repayments comprise both a capital and finance element. The
finance element is written off to the income statement so as to
produce an approximately constant periodic rate of charge on
the outstanding obligations. Such assets are depreciated over
the shorter of their estimated useful lives and the period of the
lease.
OPERATING LEASES
Operating lease rentals are charged to the income statement on
a straight line basis over the period of the lease.
PAGE 30
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 3. Significant accounting policies
(continued)
(P) EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share is calculated based on the
weighted average number of ordinary shares outstanding
during the year. Diluted earnings/(loss) per share is based upon
the weighted average number of shares in issue throughout
the year, adjusted for the dilutive effect of potential ordinary
shares. The only potential ordinary shares in issue are employee
share options.
(Q) SEGMENT REPORTING
A segment is a distinguishable component of the Group that is
engaged either in providing products or services (business seg-
ment), or in providing products or services within a particular
economic environment (geographical segment), which is sub-
ject to risks and rewards that are different from those of other
segments.
(R) ASSETS HELD FOR SALE AND DISCONTINUED
OPERATIONS
ASSETS HELD FOR SALE
Non-current assets, or disposal groups comprising assets and
liabilities, are classified as held-for-sale or held-for-distribu-
tion if it is highly probable that they will be recovered primarily
through sale or distribution rather than through continuing use.
Immediately before classification as held-for-sale or held-for-dis-
tribution, the assets, or components of a disposal group, are
remeasured in accordance with the Group’s other accounting
policies.
Thereafter, generally the assets, or disposal group, are mea-
sured at the lower of their carrying amount and fair value less
costs to sell. Any impairment loss on a disposal group is allo-
cated first to goodwill, and then to the remaining assets and
liabilities on a pro rata basis, except that no loss is allocated
to inventories, financial assets, deferred tax assets, employee
benefit assets, investment property or biological assets, which
continue to be measured in accordance with the Group’s other
accounting policies. Impairment losses on initial classification as
held-for-sale or held-for-distribution and subsequent gains and
losses on remeasurement are recognised in profit or loss. Gains
are not recognised in excess of any cumulative impairment loss.
For the year ended 31 August 2017
Notes to the Financial Statements
Once classified as held-for-sale or held-for-distribution, intan-
gible assets and property, plant and equipment are no longer
amortised or depreciated, and any equity-accounted investee is
no longer equity accounted.
DISCONTINUED OPERATIONS
A discontinued operation is a component of the Group’s busi-
ness, the operations and cash flows of which can be clearly dis-
tinguished from the rest of the Group and which:
•
•
•
represents a separate major line of business or geo-
graphical area of operations;
is part of a single co-ordinated plan to dispose of a sep-
arate major line of business or geographical area of op-
erations; or
is a subsidiary acquired exclusively with a view to re-
sale.
Classification as a discontinued operation occurs on disposal or
when the operation meets the criteria to be classified as held-
for-sale, if earlier.
When an operation is classified as a discontinued operation, the
comparative statement of comprehensive income is re-present-
ed as if the operation had been discontinued from the start of
the comparative year.
A number of the Group’s accounting policies and disclosures
4. Determination of fair values
require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been deter-
mined for measurement and/or disclosure purposes based on
the following methods. Where applicable, further information
about the assumptions made in determining fair values is dis-
closed in the notes specific to that asset or liability.
INVENTORIES
The fair value of inventories acquired in a business combination
is determined based on the estimated selling price in the ordi-
nary course of business less the estimated costs of completion
and sale, and a reasonable profit margin based on the effort
required to complete and sell the inventories.
EQUITY AND DEBT SECURITIES
The fair values of investments for equity and debt securities are
determined with reference to their quoted closing bid price at
the measurement date. Subsequent to initial recognition, the
PAGE 31
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
EQUITY AND DEBT SECURITIES (CONTINUED)
fair values of held-to-maturity investments are determined for
disclosure purposes only.
ment for the financial statements given their own knowledge of
the properties and in particular where there has been interest
from third parties in purchasing the properties, the Directors
may refer to amounts offered for purchase.
TRADE AND OTHER RECEIVABLES
The fair values of trade and other receivables are estimated at
the present value of future cash flows, discounted at the mar-
ket rate of interest at the measurement date. Short-term receiv-
ables with no stated interest rate are measured at the original
invoice amount if the effect of discounting is immaterial. Fair
value is determined at initial recognition and, for disclosure
purposes, at each annual reporting date.
Segment information is presented in respect of the Group’s
5. Segment reporting
business segments based on the Group’s management and in-
ternal reporting structure. The results of the business segments
are reviewed regularly by the Group’s CEO to make decisions
about resources to be allocated to the segment and to assess
its performance, and for which discrete financial information is
available.
PROPERTY, PLANT AND EQUIPMENT
The fair value of property, plant and equipment recognised as
a result of a business combination is the estimated amount
for which property could be exchanged on the acquisition
date between a willing buyer and a willing seller in an arm’s
length transaction after proper marketing wherein the par-
ties had each acted knowledgeably. The fair value of items of
plant, equipment, fixtures and fittings is based on the market
approach and cost approaches using quoted market prices for
similar items when available and depreciated replacement cost
when appropriate. Depreciated replacement cost reflects ad-
justments for physical deterioration as well as functional and
economic obsolescence.
INVESTMENT PROPERTY
An external independent valuation company having appropriate
recognised professional qualifications and recent experience in
the location and category of property being valued, values the
Group’s property portfolio. The fair values are based on market
values, being the estimated amount for which a property could
be exchanged on the date of the valuation between a willing
buyer and a willing seller in an arm’s length transaction after
proper marketing wherein the parties had each acted knowl-
edgeably.
In the absence of current prices in an active market, the val-
uations are prepared by considering the estimated rental val-
ue of the property. A market yield is applied to the estimated
rental value to arrive at the gross property valuation. When
actual rents differ materially from the estimated rental value,
adjustments are made to reflect actual rents. Due to the unique
nature of a number of properties within the Group’s portfolio,
external valuations are obtained, however the Directors also
review the valuations and may determine the need for impair-
Inter-segment pricing is determined on an arm’s length basis
and inter-segment revenue is eliminated.
Segment results that are reported to the CEO include items di-
rectly attributable to a segment as well as those that can be
allocated on a reasonable basis. Unallocated items mainly inter-
est-bearing loans, borrowings and expenses, and corporate as-
sets and expenses primarily relating to Company’s head office.
Segment capital expenditure is the total cost incurred during
the period to acquire segment assets that are expected to be
used for more than one period.
GEOGRAPHICAL SEGMENTS
Outsource and IT services, and industrial chemicals, now oper-
ate solely in Zimbabwe. Separate geographical analysis is there-
fore not presented.
BUSINESS SEGMENTS
For management purposes, continuing operations are organ-
ised into three main business segments:
• Outsource and IT services - includes payments systems
and business process outsourcing and payroll services;
•
Industrial chemicals - includes the manufacture and dis-
tribution of industrial solvents and mining chemicals;
• Head office.
In addition, the following segment is reported separately as a
discontinued operation in respect of the 2017 financial year:
Payserv Zambia Limited, previously in the Outsource and IT Ser-
vices segment.
PAGE 32
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
5. Segment reporting
CONTINUING OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2017
Revenue
Inter-segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit
Operating costs
Other operating income
Impairment of assets
Depreciation
Amortisation
Operating profit/(loss) for the year
Finance income
Finance expense
Income tax expense
Profit/(loss) for the year
EBITDA *
CONTINUING OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2016
Revenue
Inter-segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit
Operating costs
Other operating income
Impairment of assets
Depreciation
Amortisation
Operating (loss)/profit for the year
Finance income
Finance expense
Income tax expense
(Loss)/profit for the year
EBITDA *
INDUSTRIAL
CHEMICALS
OUTSOURCE
AND IT
SERVICES
HEAD OFFICE
US$’000
2,228
-
2,228
(1,821)
407
(618)
-
61
(17)
-
(167)
3
(2)
-
(166)
(150)
US$’000
US$’000
6,373
(3)
6,370
(412)
5,958
-
-
-
-
-
(3,333)
(1,198)
23
-
(128)
(13)
2,507
12
(83)
(660)
1,776
2,648
-
(70)
-
-
(1,268)
-
(286)
-
(1,554)
(1,268)
INDUSTRIAL
CHEMICALS
OUTSOURCE
AND IT
SERVICES
HEAD OFFICE
US$’000
3,193
-
3,193
(2,668)
525
(766)
-
-
(22)
(1)
(264)
1
(2)
-
(265)
(234)
US$’000
US$’000
5,323
(4)
5,319
(291)
5,028
-
-
-
-
-
(3,064)
(1,096)
(2)
-
(105)
(1)
1,856
15
(265)
(397)
1,209
1,962
-
5
-
-
(1,091)
-
(390)
-
(1,481)
(1,091)
* Earnings Before Interest, Taxation, Depreciation and Amortisation. Adjusted for depreciation that is included in cost of sales
TOTAL
US$’000
8,601
(3)
8,598
(2,233)
6,365
(5,149)
23
(9)
(145)
(13)
1,072
15
(371)
(660)
56
1,230
Restated
TOTAL
US$’000
8,516
(4)
8,512
(2,959)
5,553
(4,926)
(2)
5
(127)
(2)
(501)
16
(657)
(397)
(537)
638
PAGE 33
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
5. Segment reporting (continued)
DISCONTINUED OPERATIONS
FOR THE YEAR ENDED
31 AUGUST 2017
Revenue
Inter segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit
Operating costs
Depreciation
Amortisation
Operating loss
Finance income
Finance expense
Income tax credit/(expense)
Loss for the year
EBITDA*
OUTSOURCE
AND IT
SERVICES
US$’000
47
-
47
-
47
(198)
(2)
-
(153)
-
-
-
(153)
(151)
CONTINUING OPERATIONS (AS PREVIOUSLY STATED)
FOR THE YEAR ENDED
31 AUGUST 2016
INDUSTRIAL
CHEMICALS
OUTSOURCE
AND IT
SERVICES
HEAD OFFICE
Revenue
Inter-segment revenue
Revenue from external customers
Cost of sales to external customers
Gross profit
Operating costs
Other operating income
Depreciation
Amortisation
Operating profit/(loss) for the year
Finance income
Finance expense
Income tax expense
Profit/(loss) for the year
EBITDA *
US$’000
3,192
-
3,192
(2,667)
525
(766)
-
(22)
(1)
(264)
1
(2)
-
(265)
(234)
US$’000
US$’000
5,363
(3)
5,360
(295)
5,065
-
-
-
-
-
(3,308)
(1,096)
1
(104)
(1)
1,653
15
(265)
(396)
1,007
1,758
-
-
-
(1,096)
-
(390)
-
(1,486)
(1,096)
* Earnings Before Interest, Taxation, Depreciation and Amortisation. Adjusted for depreciation that is included in cost of sales
TOTAL
US$’000
47
-
47
-
47
(198)
(2)
-
(153)
-
-
-
(153)
(151)
TOTAL
US$’000
8,555
(3)
8,552
(2,962)
5,590
(5,170)
1
(126)
(2)
293
16
(657)
(396)
(744)
428
PAGE 34
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
5. Segment reporting (continued)
CONTINUING OPERATIONS - SEGMENT ASSETS & LIABILITIES
FOR THE YEAR ENDED
31 AUGUST 2017
INDUSTRIAL
CHEMICALS
OUTSOURCE AND
IT SERVICES
HEAD OFFICE
Segment assets
Segment liabilities
Capital expenditure
FOR THE YEAR ENDED
31 AUGUST 2016
Segment assets
Segment liabilities
Capital expenditure
US$’000
US$’000
US$’000
776
127
1
2,788
2,050
289
3,001
3,369
-
INDUSTRIAL
CHEMICALS
OUTSOURCE AND
IT SERVICES
US$’000
1,181
306
17
US$’000
2,102
971
153
HEAD OFFICE
US$’000
2,506
5,020
-
CONTINUING OPERATIONS - SEGMENT ASSETS & LIABILITIES (AS PREVIOUSLY STATED)
FOR THE YEAR ENDED
31 AUGUST 2016
OUTSOURCE AND
IT SERVICES
INDUSTRIAL
CHEMICALS
HEAD OFFICE
Segment assets
Segment liabilities
Capital expenditure
US$’000
1,181
306
17
US$’000
2,122
997
154
US$’000
2,506
5,020
-
TOTAL
US$’000
6,565
5,546
290
*Restated
TOTAL
US$’000
5,789
6,297
170
TOTAL
US$’000
5,809
6,323
171
ASSETS AND LIABILITIES HELD FOR SALE
FOR THE YEAR ENDED
31 AUGUST 2017
Property, plant and equipment
Trade and other receivables
Cash and cash equivalents
Total assets held for sale
Trade and other payables
Provisions
Deferred tax liabilities
Total liabilities held for sale
OUTSOURCE
AND IT
SERVICES
US$’000
TOTAL
US$’000
2
3
24
29
50
4
-
54
2
3
24
29
50
4
-
54
Net assets of disposal group held for sale
(25)
(25)
No amounts were included in Assets and Liabilities held for sale in the prior year before the reclassification of the Payserv
Zambia Limited business as a discontinued operation in the current year, requiring the restatement above.
PAGE 35
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
6. Group net operating costs
Cost of sales
Administrative expenses
Net operating costs
Administrative expenses include management related overheads for operations and head office.
NOTE
7
Operating costs include, inter alia:
Depreciation of property, plant and equipment
Depreciation of property plant and equipment in cost of sales
Amortisation
Operating lease rentals:
Land and buildings
Personnel expenses
Gain on investments and subsidiaries disposed of
Auditors remuneration
Fees Payable to the Group Auditors for:
Current year audit of the Group’s financial statements
Prior year audit of the Group’s financial statements
Total audit fees
The aggregate remuneration comprised (including Executive Directors):
7. Personnel expenses
Wages and salaries
Compulsory social security contributions
Total personnel expenses
2017
US$’000
2,233
5,307
7,541
Restated
2016
US$’000
2,958
5,056
8,014
2017
US$’000
Restated
2016
US$’000
145
7
13
166
2,528
-
82
-
82
125
7
2
191
2,418
-
98
-
98
2017
US$’000
2,366
162
2,528
Restated
2016
US$’000
2,264
154
2,418
PENSION FUNDS
The group provides for pensions on the retirement of employees by means of the Zimbabwean National Social Security Authority
(NSSA) fund and the Cambria Staff Pension Fund.
PAGE 36
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
7. Personnel expenses (Continued)
Contributions for the year were as follows:
2017
NSSA
Cambria Staff Pension Fund
Company
US$’000
19
85
Employees
US$’000
19
85
Total
US$’000
38
170
Of which: Remuneration of Group Executive Directors and Key Personnel
Directors’ emoluments (see note 34)
The average number of employees (including Executive Directors) in continuing operations was:
Outsource and IT services
Industrial chemicals
Head Office
Total
8. Net finance costs
Recognised in income statement:
Bank interest receivable
Loan interest receivable
Finance income
Bank interest payable
Loan interest payable
Finance costs
Net finance costs
9. Taxation
Income tax recognised in the income statement
Current tax expense
Current period
Deferred tax credit
Origination and reversal of temporary differences
Total income tax charge in income statement
2017
Number
2016
Number
74
16
3
93
60
24
3
87
2017
US$’000
2016
US$’000
15
-
15
-
(371)
(371)
(356)
16
-
16
-
(657)
(657)
(641)
2017
US$’000
2016
US$’000
628
32
660
421
(24)
397
PAGE 37
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
9. Taxation (continued)
RECONCILIATION OF EFFECTIVE TAX RATE
Profit/(loss) before tax
Income tax using the Zimbabwean corporation tax rate 25.75% (2016: 25.75%)
Net losses where no group relief is available
Total income tax charge in income statement
DEFERRED TAX
Relating to temporary tax differences in subsidiaries
Total
2017
US$’000
2016
US$’000
716
184
476
660
(140)
(36)
433
397
2017
US$’000
2016
US$’000
32
32
(24)
(24)
Corporation tax is calculated as 25.75% (2016: 25.75%) of the estimated assessable profit for the year. Taxation for other jurisdic-
tions is calculated at the rates prevailing in the respective jurisdictions.
Deferred tax assets are only recognised to the extent that there are available & offsetting deferred tax liabilities, unless the entity
is reasonably assured of earning sufficient future profits to offset against any future tax liabilities.
The following entities were classified as held for disposal in the previous (2016) financial year:
10. Disposals and discontinued operations
•
Litigation Settlement proceeds on the Group’s Jet Claims. The Jet Claims relate to the Group’s Air Business, a distinct busi-
ness that was reported on separately and discontinued.
The following entities were reclassified as held for disposal in the period under review, 2017 financial year. As discussed in note 2
and note 5, the comparatives for the period ended 31 August 2016 are accordingly restated.
• Payserv Zambia Limited, a subsidiary of Payserv Africa Limited.
The financial effect of these discontinued operations on the profit or loss and financial position is shown in the operating segment
disclosures in note 5 in respect of the 2016 financial year.
CASH FLOWS FROM DISCONTINUED OPERATIONS
Net cash (used in)/generated by operating activities
Net cash used in investing activities
Net cash generated from financing activities
Net cash flows for the year
Cash and cash equivalents held for sale
2017
US$’000
2016
US$’000
(55)
(1)
77
21
24
3,240
(1)
231
3,470
3
PAGE 38
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
10. Disposals and discontinued operations (continued)
ASSETS AND LIABILITIES OF OPERATIONS DISCONTINUED DURING THE CURRENT YEAR:
OUTSOURCE
AND IT
SERVICES
2017
OUTSOURCE
AND IT
SERVICES
2016
Property, plant and equipment
Trade and other receivables
Total assets of discontinued subsidiary
Trade and other payables
Provisions
Total liabilities of discontinued subsidiary
Cash and cash equivalents
US$’000
US$’000
2
3
5
50
4
54
24
3
14
17
12
14
26
3
The calculation of basic and diluted loss per share at 31 August 2017 has been based on the loss attributable to ordinary share-
11. Loss per share
holders for continuing and discontinued operations at the weighted average of ordinary shares outstanding during the period as
detailed in the table below:
LOSS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS
(Loss) for the purposes of basic loss and dilutive per share being net
loss attributable to equity holders of the parent*
- continuing operations
- discontinued operations
2017
EARNINGS
PER SHARE
US$’CENTS
(0.12)
(0.07)
(0.05)
Restated
2016
EARNINGS
PER SHARE
US$’CENTS
(0.49)
(0.39)
(0.10)
2017
US$’000
(349)
(196)
(153)
*Restated
2016
US$’000
(1,010)
(792)
(207)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Weighted average number of ordinary shares for the purposes of basic
and dilutive loss per share for all calculations*
NOTE
2017
000’S
2016
000’S
281,275
207,920
Actual number of shares outstanding at the end of the period
21
348,839
207,920
*In the current and prior year the effect of the share options (note 22) were anti-dilutive as the share options were, at all times, priced above the trading value of
the shares.
PAGE 39
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
12. Property, plant and equipment
2017 GROUP
FREEHOLD
LAND &
BUILDINGS
US$’000
PLANT &
MACHINERY
US$’000
MOTOR
VEHICLES
US$’000
FURNITURE
FIXTURES &
FITTINGS
US$’000
Cost or valuation
At 1 September 2016
Additions in year
Disposals in year
Balance at 31 August 2017
Accumulated depreciation
At 1 September 2016
Disposals in year
Depreciation charge for the year
Balance at 31 August 2017
Carrying amounts
At 31 August 2017
At 31 August 2016
2016 GROUP
Cost or valuation
At 1 September 2015
Additions in year
Disposals in year
Balance at 31 August 2016
Accumulated depreciation
At 1 September 2015
Disposals in year
Depreciation charge for the year
Balance at 31 August 2016
Carrying amounts
At 31 August 2016
At 31 August 2015
2017 COMPANY
Cost or valuation
At 1 September 2016
Additions in year
Disposals in year
Balance at 31 August 2017
Accumulated depreciation
At 1 September 2016
Additions in year
Disposals in year
2,317
-
-
2,317
(34)
-
-
(34)
2,283
2,283
76
1
-
77
(55)
-
(6)
(61)
16
21
526
247
(87)
686
(371)
85
(106)
(392)
294
155
1,032
43
-
1,075
(900)
-
(41)
(941)
134
132
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
76
1
(1)
76
(49)
-
(6)
(55)
21
27
580
105
(159)
526
(412)
129
(88)
(371)
155
168
978
64
(10)
1,032
(868)
4
(36)
(900)
132
110
FREEHOLD
LAND &
BUILDINGS
US$’000
PLANT &
MACHINERY
US$’000
MOTOR
VEHICLES
US$’000
FURNITURE
FIXTURES &
FITTINGS
US$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
-
-
10
(10)
-
-
TOTAL
US$’000
3,951
291
(87)
4,155
(1,360)
85
(153)
(1,428)
2,727
2,591
Restated
TOTAL
US$’000
3,951
170
(170)
3,951
(1,363)
133
(130)
(1,360)
2,591
2,588
TOTAL
US$’000
10
-
-
10
(10)
-
-
PAGE 40
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
12. Property, plant and equipment (continued)
2017 COMPANY
Depreciation charge for the year
Balance at 31 August 2017
Carrying amounts
At 31 August 2017
At 31 August 2016
2016 COMPANY
Cost or valuation
At 1 September 2015
Additions in year
Disposals in year
Balance at 31 August 2016
Accumulated depreciation
At 1 September 2015
Additions in year
Disposals in year
Depreciation charge for the year
Balance at 31 August 2016
Carrying amounts
At 31 August 2016
At 31 August 2015
FREEHOLD
LAND &
BUILDINGS
US$’000
PLANT &
MACHINERY
US$’000
MOTOR
VEHICLES
US$’000
FURNITURE
FIXTURES &
FITTINGS
US$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
(10)
-
-
FREEHOLD
LAND &
BUILDINGS
US$’000
PLANT &
MACHINERY
US$’000
MOTOR
VEHICLES
US$’000
FURNITURE
FIXTURES &
FITTINGS
US$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TOTAL
US$’000
-
(10)
-
-
TOTAL
US$’000
10
-
-
10
10
-
-
10
(10)
(10)
-
-
-
-
-
-
(10)
(10)
-
-
-
-
Valuations
LE HAR (PRIVATE) LIMITED
VALUATION – PROPERTY
An external, professional and independent valuer with appropriate and recognised qualifications, T.W.R.E. Zimbabwe (Pvt)
Limited (“TWRE”) carried out a valuation of the freehold land and buildings as at 31 August 2013 with reference to observed
market evidence. TWRE performed a desktop update of their valuation as at 31 August 2017. The directors having considered the
TWRE updated report, consider this value to still be an accurate reflection of the fair value at 31 August 2017 being US$2.3 million
(2016: US$2.3 million). The Directors consider the fair value at the reporting date to not be materially different from the carrying
value.
PAGE 41
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
THIS PAGE INTENTIONALLY LEFT BLANK
PAGE 42
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
As at 31 August 2017, the consolidated statement of financial position included goodwill of US$717,000 (2016: US$717,000).
13. Goodwill
Goodwill is allocated to the Group’s cash-generating units (“CGUs”), or groups of cash-generating units, that are expected to
benefit from the synergies of the business combination that gave rise to the goodwill as follows:
CASH GENERATING UNIT (CGU)
ORIGINAL COST
COST AT 1
SEPTEMBER 2016
CARRYING VALUE AT
1 SEPTEMBER 2016
ACCELERATED
WRITE-OFF
CARRYING VALUE AT
31 AUGUST 2017
US$’000
US$’000
US$’000
US$’000
US$’000
Payserv Africa Limited (formerly
Paynet Limited)
Total
717
717
717
717
717
717
-
-
717
717
ESTIMATES AND JUDGEMENTS
The following assumptions are held in the assessment on the impairment or otherwise of goodwill:
• Growth rates are based on a range of growth rates that reflect the products, industries and countries in which the relevant
CGU or group of CGUs operate. Growth rates have been calculated based on management’s expected forecast volumes
and cash generation in place at the date of this report and taking factors existing at that date into considerration.
•
•
•
•
•
The key assumptions on which the cash flow projections for the most recent forecast are based relate to discount rates,
growth rates, expected changes in selling prices and direct costs.
The cash flow projections have been discounted using rates based on the Group’s pre-tax weighted average cost of capital.
The rate used was 15%.
The growth rates applied in the value in use calculations for goodwill allocated to each of the CGUs or groups of CGUs that
is significant to the total carrying amount of goodwill were in a range between 0% and 5%.
Changes in selling price and direct costs are based on past results and expectations of future changes in the market.
In respect of the value in use calculations, cash flows have been considered for both the conservative and the full forecast
potential of future cash-flows with no impact to the valuation of goodwill.
IMPAIRMENT LOSS
The Group tests goodwill annually for impairment, or more frequently if there are indications that goodwill might be impaired.
The Directors believe that the value of the Group’s investments significantly exceed the reported value thereof and that the re-
spective book values do not adequately reflect the value of the Group’s investments and proprietary technologies. The Directors
do not believe any impairment to goodwill is necessary in the current period.
PAGE 43
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
14. Intangible assets
Payserv software licences
Total
NET BOOK
VALUE AT 1
SEPTEMBER
2016
US$’000
39
39
ORIGINAL COST
US$’000
1,538
1,538
ADDITIONS
DISPOSALS
AMORTISATION
US$’000
2
2
-
-
(14)
(14)
CLOSING
BALANCE AT 31
AUGUST 2017
US$’000
27
27
AMORTISATION
The amortisation charge is recognised within operating expenses (note 6) in the income statement. The Group tests other intangi-
ble assets for impairment if there are indications that they might be impaired.
The amortisation periods for intangible assets are:
Software licences
3 years
The Company has investments in the following subsidiaries which principally affect the profits and/or net assets of the Company.
15. Investments in subsidiaries and associates
The direct investments in subsidiaries held by the Company are stated at cost. This is subject to impairment testing.
CONTINUING OPERATIONS
COUNTRY OF INCORPORATION
OWNERSHIP INTEREST
African Solutions Limited
Autopay (Pvt) Limited
Gardoserve (Pvt) Limited
Le Har (Pvt) Limited
LonZim Enterprises Limited
LonZim Holdings Limited +
Millchem Africa Limited
Millchem Holdings Limited
MillChem (Lilongwe) Limited
MSA Chemicals (Pty) Limited
MSA Sourcing BV
Para Meter Computers (Pvt) Limited
Paynet Zimbabwe (Pvt) Limited
Payserv (Pvt) Limited
Payserv 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.
Mauritius
Zimbabwe
Zimbabwe
Zimbabwe
United Kingdom
Isle of Man
Isle of Man
Isle of Man
Malawi
South Africa
Netherlands
Zimbabwe
Zimbabwe
Zimbabwe
Mauritius
Zimbabwe
Zambia
Zimbabwe
Zimbabwe
2017
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
51%
100%
2016
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
51%
100%
PAGE 44
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
15. Investments in subsidiaries and associates (continued)
Ottonby Trading (Pvt) Ltd (address: Northridge Park, Northend Close, Harare, Zimbabwe) holds a 49% interest in Tradanet (Pvt) Ltd.
NON-CONTROLLING INTERESTS (“NCI”)
Tradanets salient financial information is as follows:-
Profit attributable to NCI
Dividends paid to NCI
Accumulated NCI at year end
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Cash flow from operations
Cash utilised in investing activities
Cash utilised in financing activities (including dividends)
Cash and cash equivalents
16. Inventory
Raw materials and consumables
Goods in transit
Finished goods
Total
2017
US$’000
252
(149)
99
74
390
2
261
462
(51)
(316)
273
2016
US$’000
266
(335)
(4)
44
208
1
261
549
(8)
(674)
178
GROUP 2017
GROUP 2016
US$’000
US$’000
25
37
171
233
192
5
210
407
PAGE 45
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
17. Financial assets at fair value through profit or loss
Quoted investments portfolio
Total
QUOTED INVESTMENTS PORTFOLIO:
Balance at 1 September
Acquired during the year
Disposed during the year
Gain/(loss) on fair valuation during the year
Gain at end of the year
GROUP 2017
GROUP 2016
US$’000
US$’000
86
86
40
40
GROUP 2017
GROUP 2016
US$’000
US$’000
40
-
-
46
86
50
-
-
(10)
40
The portfolio is managed by an asset management company who makes all the decisions regarding the sale and purchase of
listed shares. This investment is held at fair value. The portfolio, which was purchased in ‘payment’ of a trade vendor liability
which could not be settled due to Zimbabwe foreign currency constraints at the time, is callable at the option of the vendor. See
note 23.
18. Trade and other receivables
Amounts owed by Group undertakings
Trade receivables
Other receivables
Prepayments and accrued income
Total
No interest is charged on receivables.
GROUP
2017
US$’000
-
824
674
232
1,730
COMPANY
2017
US$’000
3,763
-
559
-
4,322
*Restated
GROUP
2016
US$’000
-
884
339
74
1,297
COMPANY
2016
US$’000
6,168
-
206
-
6,374
The Directors consider the carrying amount of trade and other receivables approximates their fair value. In determining the
recoverability of the trade receivable, the Group considers any change in the credit quality of trade receivables from the date
credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large
and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for
doubtful debts.
CREDIT RISK
The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the statement of financial
position are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss
event which, based on previous experience, is evidence of a reduction in the recoverability of the cashflows.
PAGE 46
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
19. Cash and cash equivalents
Bank balances
Bank overdrafts
Net cash and cash equivalents
Net cash included in held for sale
Total cash and cash equivalents in statement of financial position
GROUP
2017
US$’000
1,045
-
1,045
24
1,069
COMPANY
2017
US$’000
143
-
143
-
143
Restated
GROUP
2016
US$’000
698
-
698
3
701
COMPANY
2016
US$’000
-
-
-
-
-
20. Capital and reserves
REVALUATION RESERVE
The revaluation reserve relates to property, plant and equipment which has been revalued in the Zimbabwean subsidiaries Payserv
Zimbabwe (Private) Limited (“Payserv”) and Le Har (Private) Limited, which holds the property from which Payserv operates.
FOREIGN EXCHANGE RESERVE
This reserve arises on translation of subsidiary entities where their functional currency is not United States Dollars, the
presentational currency of the Group. The Company foreign exchange currency reserve relates to the translation of net assets due
to a change in the functional currency of the Company from Pounds Sterling to United States Dollars as at 1 September 2011.
SHARE BASED PAYMENT RESERVE
The share based payment reserve comprises of the charges arising from the calculation of the share based payment posted to the
income statement in 2011 and 2012, and released on expiration of options never exercised in 2013, 2016 and finally in the current
year.
NON DISTRIBUTABLE RESERVE
The non distributable reserve arises on the restatement of the assets and liabilities on dollarisation in Zimbabwe. Amounts held
within this reserve are ring fenced from retained earnings. Distributions can only be made from retained earnings and not from
the non distributable reserve. Amounts transferred to the non distributable reserve are determined by the directors as necessary,
unless specifically required to do so as part of any financing arrangements.
PAGE 47
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
21. Share capital & share premium
Issued and fully paid
At 1 September
Issued in period
At 31 August
ORDINARY SHARES
2017
ORDINARY SHARES
2016
SHARE
CAPITAL
US$’000
SHARE
PREMIUM
US$’000
SHARE
CAPITAL
US$’000
SHARE
PREMIUM
US$’000
NUMBER
NUMBER
207,920,406
140,918,606
348,839,012
34
17
51
83,950
207,920,406
1,736
-
85,686
207,920,406
34
-
34
83,950
-
83,950
All shares issued are classed as Ordinary Shares with a par value of 0.01 pence each and are all ranked equally. There are no other
classes of shares in issue. No warrants were granted during the current financial year and no warrants are outstanding.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
The Directors are authorised in any period between consecutive annual general meetings, or consecutive 12 month periods, to
allot any number of ordinary shares on such terms as they shall, in their discretion, determine up to such maximum number as
represents 50 per cent of the issued share capital at the beginning of such period. Further ordinary shares may also be allotted on
terms determined by the Directors but subject to the pre-emption rights prescribed by Section 36 of the Isle of Man Companies
Act 2006.
SHARE PREMIUM
The share premium represents the value of the premium arising on shares issued as follows:
22 February 2017
140,918,606 ordinary shares at a price of 1.0p per share (US$ 1,736,223)
17 April 2015
107,000,000 ordinary shares at a price of 0.85p per share (US$1,337,000)
6 March 2014
4,133,333 ordinary shares at a price of 7.5p per share (US$508,000).
4 March 2014
28,272,806 ordinary shares at a price of 7.5p per share (US$3,475,000 of which US$ 719,000 related to settle-
ment of expenses and liabilities).
1 October 2012
8,615,115 ordinary shares at a price of 10p per share (US$1,400,000).
16 September 2011 3,988,439 ordinary shares at a price of 23p per share (US$1,448,000).
10 December 2010 17,813,944 ordinary shares at a price of 28p per share net of issue costs of £143,000 (US$7,646,000).
9 December 2009
4,255,525 ordinary shares at a price of 27.5p per share net of issue costs of £58,000 (US$1,820,000).
14 July 2009
Cost of purchasing and cancelling 4,374,000 shares at 30.5p per share (US$2,174,000).
11 December 2007 36,450,000 ordinary shares at a price of 100p per share net of issue costs of £2,753,000 (US$68,659,000).
PAGE 48
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
All share options issued in prior years have now expired and were not exercised. The prior year details are included below for
22. Share options
information purposes only. The following share options over ordinary shares had been granted over the last 5 years under an Un-
approved Share Option 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
30p
30p
PERIOD DURING WHICH
EXERCISABLE
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 settled share options granted have been measured (at the time 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 options granted has been estimated at the date of grant using the Black-Scholes option pricing model. The
estimated value of the options granted on 10 March 2011 was £53,000 (US$85,000).
Options may be exercised in whole or in part until the expiry of the exercise period. Holders of the options are entitled to receive
notice of certain proposed transactions or events of the Company which may dilute or otherwise affect their options, and may ex-
ercise or be deemed to have exercised their options prior to the occurrence thereof. Ordinary Shares issued pursuant to an exercise
of the options shall rank pari passu in all respects with the Company’s existing Ordinary Shares save as regards any rights attaching
by reference to a record date prior to the receipt by the Company of the notice of exercise of options. The Company shall apply to
admit to trading on AIM the Ordinary Shares issued pursuant to the exercise of options.
The following assumptions have been used at the date of grant:
Number of shares
Share price at vesting date (Date of Grant)
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
DATE OF GRANT
10 MARCH 2011
DATE OF GRANT
10 MARCH 2011
500,000
21.75p
30p
30.2%
5.4 years
0.00%
5.00%
500,000
21.75p
30p
30.2%
6.4 years
0.00%
5.00%
Volatility has been calculated by reference to industry indices at vesting dates.
All share options vested at date of grant and the basis of settlement is in shares of the company.
The number and weighted average exercise price of share options are as follows:
Outstanding and exercisable at 31 August 2016
Outstanding and exercisable at 31 August 2017
WEIGHTED AVERAGE EXERCISE PRICE
PENCE
30
-
NUMBER OF OPTIONS
500,000
-
The Directors are authorised to grant options over the Ordinary Shares on such terms as they shall in their discretion determine
up to such maximum number as represents 10 per cent of the number of Ordinary Shares in issue.
PAGE 49
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
23. Loans and borrowings - long term GROUP
2017
US$’000
VAL Loan
CABS Loan - long term portion
Other trade payables
Total
1,565
205
77
1,849
COMPANY
2017
US$’000
1,565
-
-
1,565
GROUP
2016
US$’000
2,929
-
36
2,965
COMPANY
2016
US$’000
2,929
-
-
2,929
The VAL Loan carries interest at 8% per annum retrospectively from the inception thereof. It is repayable after three years on 30
November 2019 with early repayment at the election of VAL, from any proceeds realised from a Liquidity Event. A Liquidity Event
shall comprise the sale, whether partly or in full, of Cambria’s investments. The VAL Loan is secured through a pledge and cession
over the Company’s shares in its subsidiaries.
During the financial year, the Company announced the VAL Loan Conversion in terms of which VAL converted £1.25 million (ap-
proximately $1.55 million) of the VAL Loan into 125 million ordinary shares at 1.00p per share. The result of the VAL Loan Conver-
sion is incorporated into the figures above.
Other non-current trade payables are in respect of historic Paywell software licence fees within the Payserv Group, which could
not be remitted due to Zimbabwe foreign currency constraints at the time. The amounts due were invested into a listed portfolio
(see note 17).
24. Provisions
Provisions
Total
GROUP
2017
US$’000
186
186
COMPANY
2017
US$’000
-
-
*Restated
GROUP
2016
US$’000
193
193
COMPANY
2016
US$’000
-
-
Provisions at 31 August 2017, are in respect of the maximum Leave Pay and Retirement Gratuity which may become payable by
individual companies to employees on termination of their employment.
25. Deferred tax liability
RECOGNISED DEFERRED LIABILITY
The following are the major deferred tax liabilities recognised by the Group and movements thereon during the current year.
GROUP
At 1 September
Recognised directly in reserves
Other movements
At 31 August
2017
ACCELERATED TAX
DEPRECIATION
US$’000
2016
TOTAL
US$’000
ACCELERATED TAX
DEPRECIATION
US$’000
152
-
32
184
152
-
32
184
177
-
(25)
152
Deferred tax assets off set against deferred tax liabilities in the period were US$ nil (2016:US$ nil).
TOTAL
US$’000
177
-
(25)
152
PAGE 50
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
26. Loans and borrowings - short term
VAL Bridging Loan
CABS Loan - short term portion
Total
For the year ended 31 August 2017
Notes to the Financial Statements
GROUP
2017
US$’000
COMPANY
2017
US$’000
GROUP
2016
US$’000
COMPANY
2016
US$’000
926
630
1,556
926
-
926
1,469
-
1,469
1,469
-
1,469
The Company previously announced on 18 October 2016 that Payserv’s wholly owned subsidiary, Paynet Zimbabwe (Pvt) Limited
(“Paynet”), successfully concluded a $1.2 million loan facility agreement with Central Africa Building Society (“CABS Loan”). The
CABS Loan currently bears interest at 9% per annum (previously 11%), an annual renewal fee of 1%, and is subject to an establish-
ment fee of 2%. The loan is repayable over 24 months. As security, a mortgage has been registered in favour of CABS over one of
two properties owned by Le Har (Pvt) Ltd, a wholly owned subsidiary of the Company. The remaining property remains unencum-
bered.
The CABS Loan was used by Paynet to repay in part its license fees and loan obligations to Payserv Africa. Payserv in turn used the
funds to settle the remaining portion of the VAL Bridging Facility via Cambria.
27. Trade and other payables
Trade payables
Non trade payables and accrued expenses
Total
Current tax liability
Total
GROUP
2017
US$’000
807
567
1,374
397
1,771
COMPANY
2017
US$’000
730
1,936
2,666
-
2,666
*Restated
GROUP
2016
US$’000
693
517
1,210
308
1,518
COMPANY
2016
US$’000
472
2,428
2,900
-
2,900
Trade payables and accruals principally comprise amounts outstanding for trade purchases and on-going costs.
The Directors consider that the carrying amount of trade payables approximates to their fair value.
PAGE 51
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
28. Notes to the statement of cash flows
GROUP 2017
US$’000
Loss for the year
Adjusted for *:
Amortisation of intangible assets
Depreciation of property, plant and equipment
Loss/(Profit) on sale of property, plant and equipment
Valuation adjustments to inventories, receivables and other assets
Finance income
Finance costs
(Decrease)/increase in provisions
Income tax charge
Operating cash flows before movements in working capital
Decrease in inventories
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Cash generated from operations
* All amounts include both continuing and discontinued operations.
(97)
14
154
(19)
(46)
(15)
371
(16)
660
1,006
174
(421)
201
960
*Restated
GROUP 2016
US$’000
(744)
2
132
4
1
(16)
657
25
396
457
305
4,623
(1,441)
3,944
The Group has exposure to the following risks from its use of financial instruments:
29. Financial instruments
•
•
credit risk
liquidity risk
• market risk (comprises: foreign currency risk and interest rate risk)
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and pro-
cesses for measuring and managing risk, and the Group’s management of capital. Further quantitative disclosures are included
throughout these consolidated financial statements. The Board of Directors has overall responsibility for the establishment and
oversight of the Group’s risk management framework.
RISK MANAGEMENT FRAMEWORK
The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. The Group’s risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
PAGE 52
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
29. Financial instruments (continued)
CREDIT RISK MANAGEMENT
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appro-
priate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings of its counter-
parties are regularly monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit
evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance
cover is purchased. The Group does not have any significant credit risk exposure to any single counterparty or any group of coun-
terparties having similar characteristics. The credit risk on liquid funds and derivative financial instruments is limited because the
counterparties are banks with high credit- ratings assigned by international credit rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses, represents the
Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained. At the reporting date,
there were no significant credit risks.
EXPOSURE TO CREDIT RISK
The carrying amount of financial assets represents the maximum credit exposure. Therefore, the Group and Company’s maximum
exposure to credit risk at the reporting date, being the total of the carrying amount of financial assets, excluding equity invest-
ments is shown in the table below.
Cash and cash equivalents
Trade and other receivables
Amounts owed by group undertakings
Other investments
Total
NOTE
19
18
18
17
GROUP
2017
US$’000
1,069
1,730
-
86
2,885
COMPANY
2017
US$’000
143
559
3,809
-
4,511
GROUP
2016
US$’000
701
1,297
-
40
2,038
The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region was:
United Kingdom
Southern Africa
Mauritius
Europe
Total
GROUP
2017
US$’000
702
2,183
-
-
COMPANY
2017
US$’000
702
3,809
-
-
GROUP
2016
US$’000
206
1,832
-
-
2,885
4,511
2,038
COMPANY
2016
US$’000
-
206
6,168
-
6,374
COMPANY
2016
US$’000
206
4,585
1,583
-
6,374
PAGE 53
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
The maximum exposure to credit risk for trade and other receivables (excluding trade creditors which are linked to listed invest-
29. Financial instruments (continued)
ments per contract with the supplier - see note 17 US$86,000 (2016: US$40,000)) at the reporting date by type of counterparty
was:
Trade customers and other receivables
Amounts owed by Group undertakings
Total
GROUP
2017
US$’000
1,730
-
1,730
COMPANY
2017
US$’000
559
3,763
4,322
The ageing of trade and other receivables at the reporting date was:
COMPANY
2016
US$’000
206
6,168
6,374
GROUP
2016
US$’000
1,297
-
1,297
GROUP
Neither past nor impaired
Past due 1-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-days +
Other receivables
Total
GROSS
2017
US$’000
IMPAIRMENT
2017
US$’000
TOTAL
2017
US$’000
692
132
19
20
126
894
1,883
-
-
(7)
(20)
(126)
-
(153)
692
132
12
-
-
894
1,730
Based on the Group’s monitoring of customer credit risk, the Group believes that no further impairment allowance is necessary
in respect of trade receivables not past due.
LIQUIDITY RISK MANAGEMENT
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that
are settled by delivering cash and another financial asset.
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity
risk management framework for the management of the Group’s short, medium and long term funding and liquidity management
requirements.
The new board plans to manage liquidity risk by raising adequate reserves, banking facilities and reserve borrowing facilities and
by regularly monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
PAGE 54
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
29. Financial instruments (continued)
LIQUIDITY RISK MANAGEMENT (CONTINUED)
The following are the contractual, undiscounted maturities of financial liabilities, including estimated interest payments and ex-
cluding the effect of netting arrangements:
GROUP
CONTRACTUAL CASH FLOWS 2017
Trade and other payables
Loans and borrowings
Total
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
1,374
3,405
4,779
1,374
1,697
3,071
2 TO < 5
YEARS
US$’000
-
1,930
1,930
*Restated
CONTRACTUAL CASH FLOWS 2016
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
1,210
4,434
5,644
1,210
1,645
2,855
2 TO < 5
YEARS
US$’000
-
3,163
3,163
COMPANY
CONTRACTUAL CASH FLOWS 2017
CONTRACTUAL CASH FLOWS 2016
Trade and other payables
Loans and borrowings
Total
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
2,666
2,491
5,142
2,666
1,009
3,660
2 TO < 5
YEARS
US$’000
-
1,706
1,706
CARRYING
AMOUNT
US$’000
1 YEAR OR
LESS
US$’000
2,900
4,398
7,298
2,900
1,645
4,545
2 TO < 5
YEARS
US$’000
-
3,163
3,163
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 liabilities held in currencies other than United States
Dollars, the Group ensures that the net exposure is kept to an acceptable level, by buying or selling foreign currencies at spot rates
where necessary to address short-term imbalances. The following significant exchange rates applied during the year:
Pounds Sterling (GBP)
Euro (EUR)
Zambian Kwacha (ZMW)
South African Rand ( ZAR)
Malawian Kwacha (MWK)
AVERAGE RATE
2017
REPORTING DATE
SPOT RATE
2017
AVERAGE RATE
2016
REPORTING DATE
SPOT RATE
2016
0.79
0.91
13.39
9.48
718.94
0.77
0.84
13.01
9.05
719.33
0.70
0.90
14.79
10.85
666.36
0.76
0.90
14.67
9.52
721.75
PAGE 55
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
The Group does not account for any fixed rate financial assets or liabilities at fair value through profit or loss. At the reporting
29. Financial instruments (continued)
date the interest rate profile of the Group’s interest bearing financial instruments was as follows :
CARRYING VALUE
FIXED RATE INSTRUMENTS
Financial assets
Financial liabilities
Total
VARIABLE RATE INSTRUMENTS
Financial assets
Financial liabilities
Total
2017
US$’000
2016
US$’000
-
(3,326)
(3,326)
1,069
-
1,069
-
(4,398)
(4,398)
701
-
701
SENSITIVITY ANALYSIS
In managing foreign currency risks the Group aims to reduce the impact of short and long-term fluctuations on the Group’s earn-
ings. A 10 percent strengthening/weakening of the listed currencies against the USD at 31 August 2017 would have increased (de-
creased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest
rates, remain constant and ignores any impact of forecast sales and purchases. This analysis is performed on the same basis for
2015 and assumes that all other variables remain the same.
The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date
and their sensitivity is as follows:
31 AUGUST 2017
Pounds Sterling (GBP)
Euro (EUR)
South African Rand (ZAR)
Zambian Kwacha (ZMW)
31 AUGUST 2016
Pounds Sterling (GBP)
Euro (EUR)
South African Rand (ZAR)
Zambian Kwacha (ZMW)
Malawian Kwacha (MWA)
EXPOSURE IN
FINANCIAL
STATEMENT
POSITION US$’000
STRENGTHENING
PROFIT OR LOSS
US$’000
WEAKENING
PROFIT OR LOSS
US$’000
(382)
(23)
(1)
(27)
(281)
(20)
(120)
9
12
27
2
-
-
19
2
1
-
-
(27)
(2)
-
-
(19)
(2)
(1)
-
-
INTEREST RATE RISK MANAGEMENT
The Company does not believe it faces any risk from its interest rate exposure. The rates of interest it is exposed to are not ex-
pected to change over the tenure of its borrowings.
Currently the Company has only two lenders, Central African Building Society (CABS) Zimbabwe and Ventures Africa Limited
(VAL) which holds 66.5% of the Company’s equity. As a percent of total borrowings, 75% is represented by VAL and 25% from
CABS with a weighted average interest cost of 8.24%.
PAGE 56
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Notes to the Financial Statements
As a related party, VAL has established interest rates at levels which its funding was used to displaced former lenders and main-
29. Financial instruments (continued)
tained parity with rates which the Company has been able to obtain funding at in Zimbabwe. However, VAL does not charge the
Company establishment fees or anniversary fees. VAL has actively converted debt to equity to assist the company in reducing its
interest rate exposure and has announced its intention for further debt to equity conversions.
The rate of interest on the CABS loan is currently 9% which as a result of increased domestic liquidity has fallen from 11% in FY
2016. The Company expects this loan to be fully repaid by November 2018.
CAPITAL MANAGEMENT
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
future development of the business. Capital consists of ordinary shares, retained earnings and non-controlling interests of the
Group. The Board of Directors monitors the return on capital, which the Group defines as net operating income divided by total
shareholders’ equity, excluding non-redeemable preference shares and non-controlling interests. The Board of Directors also mon-
itors the level of dividends to ordinary shareholders.
Currently management is discussing alternatives for extending the Group’s share option programme beyond key management and
other senior employees. No decisions have been made.
The Board seeks to maintain a balance between higher returns that might be possible with high levels of borrowings and the
advantages and security afforded by a sound capital position.
FAIR VALUES
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position
are as follows:
GROUP
Cash and cash equivalents
Trade and other receivables
Quoted investment portfolio
Trade and other payables
Loans and borrowings
Total
GROUP
Cash and cash equivalents
Trade and other receivables
Quoted investment portfolio
Trade and other payables
Loans and borrowings
Total
HIERARCHY
Level 3
Level 3
Level 1
Level 3
Level 3
Level 3
Level 3
Level 1
Level 3
Level 3
CARRYING AMOUNT
2017
US$’000
FAIR VALUE
2017
US$’000
1,045
1,730
86
(1,374)
(3,405)
(1,918)
1,045
1,730
86
(1,374)
(3,405)
(1,918)
CARRYING AMOUNT
2016
US$’000
*Restated
FAIR VALUE
2016
US$’000
698
1,297
40
(1,210)
(4,434)
(3,609)
698
1,297
40
(1,210)
(4,434)
(3,609)
PAGE 57
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
29. Financial instruments (continued)
COMPANY
CARRYING AMOUNT
2017
US$’000
FAIR VALUE
2017
US$’000
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Loans and borrowings
Total
COMPANY
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Loans and borrowings
Total
Level 3
Level 3
Level 3
Level 3
Level 3
Level 3
Level 3
Level 3
143
4,322
(2,666)
(2,491)
(692)
143
4,322
(2,666)
(2,491)
(692)
CARRYING AMOUNT
2016
US$’000
FAIR VALUE
2016
US$’000
-
6,374
(2,900)
(4,398)
(924)
-
6,374
(2,900)
(4,398)
(924)
THE FAIR VALUE OF ASSETS AND LIABILITIES CAN BE CLASSED IN THREE LEVELS.
Level 1
Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
Level 3
Fair values measured using inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Fair values measured using inputs for the asset or liability that are not based on observable market data (i.e. unob-
servable inputs).
ESTIMATION OF FAIR VALUES
The following summarises the major methods and assumptions used in estimating the fair values of financial instruments reflect-
ed in the above table.
CASH AND CASH EQUIVALENTS
Fair value approximates its carrying amount largely due to the short-term maturities of this instrument.
LOANS AND BORROWINGS
Fair value has been derived from discounting future cash flows at the cost of debt.
TRADE RECEIVABLES AND PAYABLES
For receivables and payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.
QUOTED INVESTMENT PORTFOLIO
Fair value has been derived from quoted prices.
PAGE 58
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
less than $100 thousand and General warranty claims
shall not be less than $25 thousand for a single claim.
To the date of the report, no formal warranty claim has been
lodged.
30. Operating leases
LEASES AS LESSEE
At the reporting date, the Group had the following outstanding
annual commitments for future minimum lease payments un-
der non-cancellable operating leases:
US$’000
34. Related parties
Operating lease commitments
Payable in next 12 months
Payable in 1 to 5 years
Payable thereafter (> 5 years)
Total
68
5
-
73
During the year ended 31 August 2017, US$166,000 (2016:
US$191,000) was recognised as an expense in the income state-
ment in respect of operating leases. Operating lease payments
represents rentals payable by the Group for certain of its prop-
erties. Leases are negotiated for a minimum term of 1 year and
rentals are fixed for the period.
31. Statement of comprehensive income
There is no requirement under the Isle of Man Companies Act
of Cambria Africa Plc
2006 to present a company only statement of comprehensive
income. The loss for the year to 31 August 2017 was US$1.52
million (2016: US$1.54 million).
The capital commitments at 31 August 2017 totalled US$nil
32. Capital commitments
(2016: US$nil).
33. Contingent liabilities
On 21 October 2014, the Group, pursuant to its disposal of
Lonzim Hotels Limited, provided warranties relating to matters
fairly disclosed to the Purchaser in terms of the relevant sale
and purchase agreement and the related disclosure letter and/
or due diligence data. General warranties remained in force and
effect until 31 August 2015 and Title warranties remained in
force and effect until 21 October 2016. The liability of the Group
in respect of the aggregate of all Title warranties shall not ex-
ceed $2 000; and in respect of the aggregate of all General war-
ranties, shall not exceed $350 thousand. The Group will have
no liabiilty in respect of General warranty claims in aggregate
IDENTITY OF RELATED PARTIES
The Group has a related party relationship with its subsidiaries
(see note 15) and with its Directors and executive officers.
Transactions between the Company and its subsidiaries, which
are related parties, have been eliminated on consolidation and
there is no requirement for them to be disclosed in this note.
GROUP AND COMPANY
At 31 August 2017, no amounts were due to Directors in respect
of Directors fees, nor had any been paid in the year under re-
view.
VAL is the controlling shareholder of Cambria with a 66.5% in-
terest as at 31 August 2017. Mr Samir Shasha is the ultimate
beneficial owner of VAL and the CEO and Director of Cambria.
VAL has provided loan funding to Cambria in the form of the
VAL Loan and the VAL Bridging Facility as set out in notes 23 and
26 respectively. Interest accrued during the period amounted to
US$180,000 in respect of the VAL Loan and $106,000 in respect
of the VAL Bridging Facility.
TRANSACTIONS WITH SUBSIDIARY ENTITIES WITHIN
THE GROUP
Paynet Zimbabwe (Private) Limited (“Paynet”), a 100% subsid-
iary of the Group and provides services including payroll pro-
cessing, software licensing, training and utility and property
sublets to fellow subsidiaries which amounted to US$3,000
(2016: US$3,000). All charges were at market value and arms
length rates.
TRANSACTIONS WITH KEY MANAGEMENT
PERSONNEL
Key management personnel are the holding Company Directors
and executive officers. None of the current active directors re-
ceived any remuneration during the financial year.
PAGE 59
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Notes to the Financial Statements
Total remuneration is included in “personnel expenses” (see
34. Related parties (continued)
note 7).
S Shasha
P Turner
JP Watenphul
DC Pandya
Total
TOTAL
2017
US$000
TOTAL
2016
US$000
-
-
-
-
-
-
-
-
-
-
35. Events after the reporting date
Settlement of the Consilium dispute
On 4 October 2017, the Company executed a settlement
deed with Consilium, the terms of which provide that:-
Cambria and Consilium agree to settle all claims against
each other;
Cambria will pay Consilium US$223,000 and each party grants
the other and their respective directors and associated parties
releases from claims relating to the matters that were in dispute;
The money deposited at the Courts Funds Office by Cambria as
security for costs in the sum of GBP381,342 shall, subject to an
agreed amount being paid to Consilium by way of contribution
to the settlement amount, be released in full back to Cambria;
To protect the interests of Cambria and its shareholders situa-
tions not related to Consilium or the present dispute have been
excluded from the scope of the releases granted by Cambria.
PAGE 60
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017
For the year ended 31 August 2017
Corporate Information
REGISTRARS
Neville Registrars Limited
Neville House
18 Laurel Lane
Halesowen
England
BD63 3DA
Tel: +44 (0) 12 1585 1131
PRINCIPAL GROUP BANKERS
Barclays Corporate
Level 27, 1 Churchill Place
Canary Wharf
London
E14 5HP
Tel: +44 (0) 20 7116 1000
REGISTERED OFFICE AND AGENT
Peregrine Corporate Services Limited
Burleigh Manor
Peel Road
Douglas
Isle of Man
IM1 5EP
Tel: +44 (0) 1624 626586
NOMINATED ADVISOR AND BROKER
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Tel: +44 (0) 20 7220 1666
AUDITORS
Baker Tilly Isle of Man LLC
2a Lord Street
Douglas
Isle of Man
IM99 1HP
T: +44 (0) 1624 693900
PAGE 61
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 For the year ended 31 August 2017
Shareholder Information
Note: the shareholding analysis has been performed on 16 February 2018 incorporating changes since the year end of 31 August
Analysis of ordinary shareholdings as at 16 February 2018
2017
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 – 250,000,000
Total
NUMBER OF HOLDERS
% OF TOTAL HOLDERS
NUMBER OF SHARES % OF TOTAL SHARES
84
118
202
62
48
49
36
6
1
202
41.6%
58.4%
100.0%
30.7%
23.8%
24.3%
17.8%
2.9%
0.5%
100.0%
19 958 998
332 614 770
352 573 768
145 516
968 951
9 484 537
56 821 896
53 152 868
232 000 000
352 573 768
5.7%
94.3%
100.0%
0.0%
0.3%
2.7%
16.1%
15.1%
65.8%
100.0%
REGISTRARS
All administrative enquiries relating to shareholdings, such as queries concerning dividend payments, notification of change of
address or the loss of a share certificate, should be addressed to the Company’s registrars.
UNSOLICITED MAIL
As the Company’s share register is, by law, open to public inspection, shareholders may receive unsolicited mail from organisations
that use it as a mailing list. Shareholders wishing to limit the amount of such mail should write to the Mailing Preference Society,
Freepost 29 Lon20771, London W1E 0ZT.
PAGE 62
CAMBRIA AFRICA PLC FINANCIAL REPORT 2017 Cambria Africa Plc
Burleigh Manor
Peel Road
Douglas IM1 5EP
Tel: +44 (0) 203 287 8814
info@cambriaafrica.com
www.cambriaafrica.com