Cambria Africa plc
Annual Report 2021

Plain-text annual report

CAMBRIA AFRICA PLC ANNUAL REPORT 2021 Committed to relentlessly increasing shareholder value. Table of Contents Results for the year Chief Executive’s Report Directors Directors’ Responsibilities Statement Directors’ Report Report of the Independent Auditors, Baker Tilly Isle of Man LLC Consolidated and Company Statement of Profit and Loss Consolidated and Company Statement of Comprehensive Income Consolidated and Company Statement of Changes in Equity Consolidated and Company Statement of Financial Position Consolidated and Company Statement of Cash Flows Notes to the Financial Statements Corporate Information Shareholder Information Page 1 to 3 4 to 5 6 7 8 to 13 14 to 17 18 to 19 20 21 to 22 23 24 to 25 26 to 59 60 61 Cambria Africa Plc Results for the year ended 31 August 2021 A Profit Attributable to Cambria Shareholders of $82,000 (0.02 US cents per share) was recorded for FY 2021. The Company’s subsidiaries in Zimbabwe continued to operate above breakeven in both EBITDA and accounting profit despite shrinkage in its revenue footprint by 8% from US $1.32 million in 2020 to US $1.22 million in 2021. The Company’s subsidiaries are expected to continue reporting at breakeven levels in FY 2022. The bulk of the Company’s FY 2021 consolidated profits stem from Payserv revenues of US$1.14 million. Net Equity (NAV) fell by 1.63% from US $6.42 million in FY 2020 to $6.32 million FY 2021 (1.16 US cents per share). The bulk of this loss was attributable to reduction in the market value of the business premises by $200,000, and impairment of Old Mutual Limited shares. FY 2021 Results highlights: 12 Months (US$'000) Group: - Revenue - Operating Costs - Consolidated EBITDA (before exceptional items) - Consolidated Profit/(Loss) after tax - Profit/(Loss) after tax attributable to shareholders (excluding minorities) - Central costs - Earnings/(Loss) per share – cents - Net Asset Value (NAV) Attributable to shareholders (excluding minorities) - NAV per share – cents Weighted average shares in issue (‘000) Shares in issue at year-end (‘000) Divisional: - Payserv – consolidated profit after tax ("PAT") - Payserv – consolidated EBITDA - Millchem – EBITDA Group Highlights: 2021 2020 Change 1,216 838 369 181 82 151 0.02 6,317 1.16 1,319 845 160 (470) (408) 224 (0.07) 6,423 1.18 544,576 544,576 544,576 544,576 (8%) (1%) 131% 139% 120% 33% 120% (2%) (2%) - - 652 484 11 34 (103) 140 1,818% 568% (92%) • Net Equity (NAV) decreased by 1.63% from US $6.42 million (1.18 US cents per share) to US $6.32 million (1.16 US cents per share). • • • Group Finance costs dropped by 63% to $22,000 in FY 2021 from $60,000 in FY 2020 after rising 17.6% from $51,000 in FY 2019. Finance costs are expected to decrease significantly in FY 2022. Revenues declined by 8% to $1.22 million while operating costs declined by 0.8% to $838,000. As a result of careful cost management, the Company has managed to avoid significant losses from the shrinkage of its revenue as a consequence of COVID and its inability to regain traction for its bulk payment and clearing software for banks. Cambria’s Attributable PAT was positive at $82,000 (0.02 cents per share) as operations edged above breakeven. Central Costs associated with listing and interest expense dropped by 33% to $151,000 from $224,000. The balance of Central Costs was associated with hyperinflationary adjustments, foreign currency translation and the loss of value in the shares of Old Mutual Limited. • Consolidated EBITDA before fair value adjustments to investments and marketable securities increased by 131% 1 to $369,000 from $160,000 in FY 2020. FY 2020 EBITDA was negatively impacted by the fair value adjustment of the Company’s indirect holding of Radar Holdings Limited shares from 40 US cents to 35 US cents. • • Cambria's central costs dropped by $73,000 to $151,000 in FY 2021. Cambria’s CEO and Directors rendered services to Cambria without compensation during FY 2021. The Statement of Comprehensive Income includes a foreign currency translation adjustment (loss) of $4,000 attributable to Cambria. Divisional Highlights: • • Tradanet (Pvt) Ltd, Paynet Zimbabwe’s 51% held subsidiary, continued to provide loan management services to CABS, the country’s largest building society. The continued devaluation of the country’s currency led to a slight increase in salary-based loans. Autopay, Paynet Zimbabwe’s payroll processing division saw an increase in its revenue base due to a new management team with extensive payroll experience and established an independent contract relationship with payroll managers on a pure profit share basis. • Millchem, through its partnership with Merken (Pvt) Ltd still sees profitability, though diminishing, in the sanitizer sector. Net Equity (Net Asset Value): Components of Loss to NAV in 2021 The Group reported a slight drop of $106,000 in NAV to $6.32 million (1.16 US cents per share) in August 2021, compared to $6.42 million (1.18 US cents per share) at 31 August 2020. This marginal decrease was caused by the following material factors: • Downward adjustment of $200,000 in the valuation of Company’s Mt. Pleasant Business Park commercial property by Hollands from $2.5 million to $2.3 million. Hollands cited business and economic conditions for the change in their valuation. • Reduction of $16,000 in the carrying value of Old Mutual Limited shares which were suspended from trading on the Zimbabwe Stock Exchange (ZSE) on 31 July 2020. • Foreign Currency Translation loss of $4,000 from the deterioration of the official bank rate from ZWL 83.4/USD on 31 August 2020 to 85.91/USD on 31 August 2021. The foreign currency translation loss was nominal in FY 2021 due to less cash held in Zimbabwe dollars compared to FY 2020. Components of NAV at 31 August 2021 The Group NAV of $6.32 million as at the end of FY 2021 consists of the following tangible and intangible assets: Building and properties valued at $2.3 million - This number, down $200,000 from the prior valuation, was prepared by Hollands Harare Estate Agents in February 2022. Holland conducted the previous valuations of this prominently located commercial office space and its equally well-positioned vacant plot in Harare’s Mount Pleasant Business Park. Indirect shareholding of 9.74% of Radar Holdings Limited - (4.98 million shares) valued at US $1.743 million (net of minority interests) based on 35 US cents per equivalent Radar share. USD Cash and Cash Equivalents – US dollar cash net of liabilities Zimbabwe totalled $1.34 million at the end of FY 2021. Old Mutual Limited shares – the Company holds 204,047 Old Mutual Limited common shares that were suspended on the Zimbabwe Stock Exchange (ZSE) on 31 July 2020 and valued on its FY 2021 Statement of Financial Position at US $184,000 based on the closing price of Old Mutual Limited on the JSE at year end. The value of Old Mutual shares closed at US $196,000 on the JSE on 29 March 2022. 2 Goodwill – The Company has a goodwill value of $717,000 on its Statement of Financial Position. The Company believes this is a fair assessment of its intangible assets. Despite the shrinkage of Paynet’s operations, it continues to maintain turnaround opportunities particularly in Tradanet and Autopay as real salaries catch up with inflation. The Company continues to believe that the Paynet’s intellectual property has value and the amalgamation of the above should exceed the book value of its goodwill. The Company therefore believes its tangible, intangible and realizable NAV are not subject to significant negative shocks and will probably benefit from any positive events. 3 Cambria Africa Plc Chief Executive’s Report Cambria Africa earned 0.02 US cents per share during the 2021 financial year compared to a loss of 0.07 US cents per share in the 2020 financial year. The Company continues to rationalise its operations by reducing staff costs and ensuring a more effective model to realise earnings from its intellectual property and cash holdings. At this point in time, the Company’s investment attraction is realizable NAV within the constructs of Zimbabwe’s current economic policy and its outlook. It is important to consider the components of NAV and efforts of the Company to ensure that any disposal is realized at the holding level. The Company’s investment in Zimbabwe since its establishment has been over $100 million. Almost $6 million of this investment was my direct contribution to this investment since taking the helm of Cambria when it was at the brink of bankruptcy. Strategy The strategic goals of the Company have been and continue to be: • • • • • Conserving cash resources of US$1.66 million as at 31 August 2021 (US$1.56 million at 28 February 2022) Realizing value for US $1.35 million held by the Reserve Bank of Zimbabwe (RBZ) as “Legacy Debts” or “Blocked Funds” and owed to the Company. This asset has been depreciated in our accounts to the official value until such time as the RBZ honours this commitment. Therefore its contribution to NAV is practically zero but remains a legal obligation of the RBZ to Cambria Africa plc. Achieving value for US $196,000 of Old Mutual shares (based on JSE closing price on 29 March 2022) through repatriation of these shares to the South African register. Maximizing value at the holding level for disposals of about $4 million in marketable securities and property. Achieving value for the Company’s intellectual property both in current and future operations. NAV Discussion As announced, despite the turnaround in earnings, NAV declined by US$106,000 from 1.18 US cents per share to 1.16 US cents per share. I would like to further discuss and analyse the components of Cambria’s realizable NAV at the holding level. Commercial Property - One component of this drop was the change in Hollands Harare Estate Agents valuation of our prominently located Mt. Pleasant Business Park Commercial Property from $2.5 million in FY 2020 to $2.3 million as of January 2022. I believe this is a conservative valuation. Old Mutual Shares - NAV, was marginally impacted by the change in the closing value of the Company’s Old Mutual Limited shares on the Johannesburg Stock Exchange compared to the last closing price on the Zimbabwe Stock Exchange (ZSE). On 31 July 2020, the ZSE, under pressure from the government of Zimbabwe, halted trading in dual listed shares. In March 2020, the Government of Zimbabwe had already blocked the fungibility of dual listed in either direction and applied this rule to foreign and local investors alike, regardless of the Exchange where the shares were originally purchased. The suspension of fungibility was extended for 12 months to March 2022 and will likely be extended again by the Government of Zimbabwe. We continue to appeal to the Government of Zimbabwe to allow repatriation of Old Mutual shares by foreign investors to the foreign exchange where the shares were originally purchased before transfer to the Zimbabwe register. Old Mutual shares have an intrinsic international value and we will continue to work towards achieving this value despite not being able to hedge the market value of the shares. Radar Holdings Limited - Another component of the Company NAV is its indirect shareholding in Radar having failed in our bid to exercise constructive control. The Company is actively pursuing avenues to sell its interest in Radar. If successful, such a sale will earn the Company about $1.7 million less costs. The Company will only sell its investment if it can achieve value at the holding level. The investment is robust and if a sale is not achievable in this fiscal year, the Company is confident that the holding will preserve its value. 4 Goodwill - Another component of NAV is the Company’s goodwill (intellectual property). Currently, intellectual property is driving the earnings in Tradanet – the largest contributor to the Company’s earnings. This 51% owned subsidiary of Paynet processes microloans on behalf of CABS, Zimbabwe’s largest Building Society. At their peak in in 2019, these microloans comprised about a third of the bank’s assets and the Directors believe that a return to those levels is fully conceivable. Almost three years has passed since banks collectively blocked the use of Paynet’s payment technology, claiming varying levels of ability to pay in foreign currency and immediate availability of locally priced solutions. Recently, Paynet’s technology has been displaced at least in part by ZeePay. ZeePay’s payment technology is operated by ZimSwitch and developed by Bankserv. ZimSwitch, which is headed by Cyril Nyatanza (formerly Bankserv’s Business Development manager), now effectively controls 99% of national payment in Zimbabwe The Company understands that ZeePay is charging banks 16 US cents in foreign currency, which is the same price banks collectively refused to pay Payserv Africa in 2019. Transaction costs for the consumer have catapulted by several hundred percent since the banking fraternity ousted Paynet from competition. The Company believes that its technology, which processed close to 25 million transactions annually before June 2019 with revenues of over $7 million, remains the most cost-effective solution for the banking industry and would promote competition. Moreover, in its agreement with the RBZ Governor in 2019, Paynet had committed to repatriate 70% of its transaction revenue to Zimbabwe. The Board of Paynet approved licensing an unlabelled version of the product if favourable transaction terms can be established with a reputable licensor. Continuing Operations Tradanet - As mentioned in the discussion of our goodwill above, Tradanet, the 51%-owned subsidiary of Paynet Zimbabwe, is now the company’s most profitable operation. With the impact of Zimbabwe dollar inflation, this saw a rise in the loan book administered by the business. However, this is watered down in real US dollar value terms. The value of the Zimbabwe dollar to the US dollar fell by 2% since the prior trading year according to the official foreign currency auction. The RBZ auction rate however belies the significant rate of inflation and the concomitant decline in the purchasing power of the Zimbabwe Dollar. Cambria applies hyperinflationary accounting rules which are meant to adjust for such idiosyncrasies. Autopay - The company’s payroll operation saw its revenues decline as Paywell granted non-exclusive licenses to multiple competitors in the market including former employees. During the year, the company reached a management agreement with Propay (Pvt) Ltd and established former account executives as independent contractors. This has resulted in cost containment and aligned the incentives of the payroll executives to that of Autopay. Millchem – Millchem remains with its sanitizer business. The sanitiser market has been characterized by many small players and competition which drove prices down and sadly the quality and reliability of the competing products. Our joint venture with Merken (Pvt) Ltd in the production of sanitizer products remains cash flow positive, but will likely wind down by the end of this fiscal year if demand does not improve. Cambria’s Board of Directors and I have continued to serve the Company without compensation since 2015, fighting to return value to shareholders. Despite the unfavourable economic factors leading to the abandonment of parity to the US dollar and its huge impact on the Company, we hold on jealously to our cash, our liabilities are negligible, and our remaining operations are profitable. We still see value in our listing, having disposed of most of the Company’s depreciating assets and used the proceeds to bring remaining liabilities down to their current negligible values. We remain cautiously optimistic about achieving full value for the Company’s assets beyond its NAV. At this point in time, we hope to increase shareholder value through appreciation of the Company’s share price to reflect at the very least, net equity per share. This would bring our market valuation closer to the Company’s current NAV of 1.16 US cents per share which is 3.5 times the closing price of 0.36 US cents per share (£0.275) on 28 March 2022. Samir Shasha 31 March 2022 5 Directors Paul Turner, 75 NON-EXECUTIVE CHAIRMAN Paul Turner is a Chartered Accountant and past President of the Institute of Chartered Accountants of Zimbabwe. He is a highly respected and knowledgeable member of the Zimbabwean business community. He was a partner at Ernst & Young in Harare, Zimbabwe, for over thirty years. His past roles bring an unparalleled level of experience in the structure and operation of businesses in Zimbabwe in general, and also valuable insights and experience in corporate governance, financial and statutory reporting. Initially appointed to the Cambria board on 1 July 2008, he was appointed as Chairman on 8 July 2015. Samir Shasha, 62 CHIEF EXECUTIVE OFFICER Samir Shasha started his involvement in Southern Africa with 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 bachelor’s degree from Vassar College with Honours in Economics in 1981. Mr. Shasha brings a wealth of experience to the Board. His skills encompass operational and strategic management experience at executive level with a successful track-record in optimal capital allocation in Zimbabwe and Southern Africa, with experience of operating in the dynamic environment presented by the Zimbabwe economy. 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, 41 NON-EXECUTIVE DIRECTOR Josephine Watenphul is a qualified Chartered Accountant (South Africa). She joined the UCS Group Limited (“UCS”), a Johannesburg-based investment holding company in technology and associated businesses listed on the Johannesburg Stock Exchange, in April 2004. In April 2009, Josephine 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, Josephine assisted in various corporate actions and restructurings. Josephine’s experience allows her to provide the Board with guidance and input on financial reporting, strategy, corporate governance and corporate transactions in a listed company environment. She was appointed to the Cambria board on 17 June 2015. Dipak Champaklal Pandya, 63 NON-EXECUTIVE DIRECTOR Dipak Pandya is a Chartered Accountant and has, since March 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 brings extensive financial management and strategic skills to the Board, with an intimate knowledge of the Zimbabwe market and experience in operating business in Southern Africa. He was appointed to the Cambria board on 26 June 2015. Changes to the Board No change to the board of directors has occurred during the financial period under review and up to the date of this report. 6 Directors’ Responsibility Statement in Respect of the Directors’ Report and the Financial Statements. Company law requires the Directors to maintain financial records that are sufficient to show and explain the Group’s transactions and will, at any time, enable the financial position of the Group to be determined with reasonable accuracy. 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. 7 Directors’ Report For the Year Ended 31 August 2021 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 2021. Principal activities During the year, the Group was an investment company with a portfolio of investments in Zimbabwe and cash holdings outside Zimbabwe. Investing policy The Company’s investment objective is to provide Shareholders 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. Indigenisation legislation within Zimbabwe may, however, prevent the Company from acquiring or maintaining a majority control in a Zimbabwean business. 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. The Company’s investment strategy is dependent upon 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. Results The Group made a consolidated profit after tax, discontinued operations and minorities of $82,000 (FY2020: loss $408,000) during the year and this has been set against reserves. 8 Share capital There were no changes to the Company’s share capital and share premium during the financial year. Full details on share capital and share premium are contained in note 20 to the financial statements. Share price performance Between 1 September 2020 and 31 August 2021, the share price varied between a closing high of 0.50p and a low of 0.25p (2020: high of 0.45p and low of 0.215p). At 31 August 2021 the market price of the shares at close of business was 0.32p (2020:0.28p) whilst on 27 March 2022 the mid-price of the share was 0.25p. Substantial shareholdings The Directors have been advised of the following shareholdings at 29 March 2022 of holding 2.5 per cent or more of the Company’s issued share capital: Ventures Africa Ltd* Hargreaves Lansdown (Nominees) Ltd Luna Rock Nominees Ltd Luna Nominees Ltd NUMBER OF SHARES 377,000,000 22,683,210 16,695,200 15,533,020 PERCENTAGE OFISSUED CAPITAL 69.2% 4.2% 3.1% 2.9% *Ventures Africa Limited is beneficially owned by S Shasha, a director and the CEO of the Company Directors Biographical details of all Directors as well as the dates of appointment and resignation (if applicable) are set out on page 6. Directors’ share interests The Directors who were in office at the beginning and end of the current financial year had the following interests in the shares of the Company: DIRECTORS Samir Shasha* Josephine Watenphul Dipak Pandya Paul Turner Total *Held indirectly through Ventures Africa Limited AT 31.08.21 NO. OF SHARES 377,000,000 2,500,000 1,000,000 1,000,000 381,500,000 AT 31.08.20 NO. OF SHARES 377,000,000 2,500,000 1,000,000 1,000,000 381,500,000 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. Auditors Baker Tilly Isle of Man LLC continues to be the appointed auditors. 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 they ought to have taken as a Director to make themselves aware of any relevant audit information and to establish that the Company’s Auditors are aware of that information. 9 Statement of Compliance with the QCA Corporate Governance Code As a listed company traded on the AIM market of the London Stock Exchange (“LSE”) we recognise the importance of sound Corporate Governance throughout our Group. It is the Board’s responsibility to ensure that Cambria is managed for the long- term benefit of all stakeholders, with effective and efficient decision-making. Corporate Governance is an important part of this, reducing risk and adding value to our investments, shareholders and other stakeholders. In my capacity as Chairman, I have ultimate responsibility for ensuring the Board adopts and implements a recognised Corporate Governance Code in compliance with the AIM Rules requiring all AIM-listed companies to adopt such a Code. The Board has committed to the adoption of, and working to, the Quoted Companies Alliance (QCA) Corporate Governance Code 2018. The Chief Executive Officer (CEO) has responsibility for the implementation of governance throughout our organisation, commensurate with our size of business and scope of operations. The QCA Corporate Governance Code 2018 has ten key principles and we set out below how we apply those principles to our business. Principle 1: Establish a strategy and business model which promotes long-term value for shareholders Cambria is a long-term active investment company holding investments in Zimbabwe. We currently own two core subsidiaries, Payserv and Millchem. The Company is one of a few AIM listed companies which allows investors to participate in Zimbabwe’s unique potential. Our Board is committed to the creation of long-term shareholder value through our investments and being actively involved in developing investee strategy, optimising their operations and growing their businesses. We adopt a prudent and conservative investment philosophy, balancing expecting returns in the context of identifiable risks. Our focus on Zimbabwe stems from our belief that Zimbabwe will provide a growing market for our current investments and opportunities which the management team is uniquely positioned to identify and act on. Principle 2: Seek to understand and meet shareholder needs and expectations The Board is committed to maintaining good communications and having constructive dialogue with both its institutional and private shareholders. Shareholders are kept informed though our public announcements and corporate website. The Company website also allows shareholders and prospective shareholders to register for automatic news alerts for regulatory announcements. In addition to the above, the Board encourages direct engagement from our shareholders with our most senior Executives including our CEO, with his direct contact details provided on our website and all company announcements. This is in line with our strategy of shortening the communication distance between Executives and Shareholders. Principle 3: Take into account wider stakeholder and social responsibilities and their implications for long-term success The Board recognises that the Company’s continued growth and long-term success are reliant on its relations with its stakeholders, both internal (employees and shareholders) and external (customers, service providers, suppliers and advisors). The Group’s employees are considered key in delivering successful growth and as such the Company fosters an open dialogue throughout its workforce. The Company endeavours to keep its workforce informed on the Company’s progress. The Company also maintains regular dialogue with its external stakeholders particularly its clients and customers which help drive business development. The Company works closely with its advisors to ensure it operates in conformity of its listing and other regulations in the UK, as well as the social and legal requirements of Zimbabwe. Our clients and customers are our most important stakeholders and understanding their needs is a crucial element to the growth and long-term success of the Company. Engaging with our stakeholders strengthens our relationships and helps us make better business decisions to deliver on our commitments. 10 Principle 4: Embed effective risk management, considering both opportunities and threats, throughout the organisation AUDIT, RISK AND INTERNAL CONTROLS FINANCIAL CONTROLS The Company has an established framework of internal financial controls, the effectiveness of which is regularly reviewed by the Board in light of an ongoing assessment of significant risks facing the Company. • • • The Board is responsible for reviewing and approving overall Company strategy, approving operating and capital budgets, and for determining the financial structure of the Company including treasury, tax and dividend policy. There are comprehensive procedures for budgeting and planning, for monitoring and reporting to the Board business performance against those budgets, and for forecasting expected performance over the remainder of the financial period. These cover profits, cash flows, capital expenditure and the Statement of Financial Position. Monthly results are reported against budget and compared with the prior year, and forecasts for the current financial year are regularly revised in light of actual performance. The Company has a consistent system of prior appraisal for investments, overseen by the Board and CEO, with defined financial controls and procedures with which each business area is required to comply. NON-FINANCIAL CONTROLS The Board recognises that maintaining sound controls and discipline is critical to managing the downside risks to our strategy. The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group’s internal control system include: • • Close management of the day-to-day activities of the Group by Executive Management. An organisational structure with defined levels of responsibility, which promotes entrepreneurial decision-making and rapid implementation while minimising risks. A comprehensive annual budgeting process approved by the Board. • Detailed monthly reporting of performance against budget. • Central control over key areas such as capital expenditure authorisation and banking facilities. The Group continuously reviews its system of internal control to ensure compliance with best practice, while also having regard to its size and the resources available. As part of the Group’s review a number of non-financial controls covering areas such as regulatory compliance, business integrity, health and safety, risk management, business continuity and corporate social responsibility (including ethical trading, supplier standards, environmental concerns and employment diversity) have been assessed. Principle 5: Maintaining the Board as a well-functioning, balanced team led by the Chair The Board comprises the CEO and three Non-Executive Directors, including the Non-Executive Chairman. The Board will meet periodically or at any other deemed time necessary for the good management of the business and at a location agreed between the Board members. The Non-Executive Directors, Paul Turner, Dipak Pandya and Josephine Watenphul, are all considered independent directors not withstanding Paul Turner’s length of service and role as Chairman. The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational. 11 DIRECTORS’ CONFLICT OF INTEREST The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. Principle 6: Ensure that between them the Directors have the necessary up to date experience, skills and capabilities The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, including in the areas of fin-tech, information technology, distribution, finance, business development, trading, and marketing. All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. The business reports monthly on its subsidiaries’ performance against their agreed budgets, and the CEO reviews the monthly reports on performance and any significant variances are reviewed. All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense. Principle 7: Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement The Board considers evaluation of its performance and individual directors to be an integral part of Corporate Governance to ensure it has the necessary skills, experience and abilities to fulfil its responsibilities. The goal of the Board evaluation process is to identify and address opportunities for improving the performance of the board and to solicit honest, genuine and constructive feedback. The Board considers the evaluation process is best carried out internally given the Company’s current size. The internal evaluation process includes the following aspects which are subject to review annually or as required by circumstances: a) Board Evaluation • • • • • • Board composition in terms of skills, experience and balance Board cohesion Board operational effectiveness and decision making Board meetings conduct and content and quality of information The Board’s engagement with shareholders and other stakeholders The corporate vision and business plan b) Individual Director Evaluation • Executive Director performance in executive role • Executive Director performance and contribution to the Board • Non-Executive Director performance and contribution to the Board • Non-Executive Director’s independence and time served • All Directors’ attendance at Board and Committee meetings The Board will, as a whole or in part as appropriate, undertake the evaluation process aided by the Chairman, CEO and Non- Executive Directors. The Chairman is responsible in ensuring the evaluation process is ‘fit for purpose’, as well as dealing with matters raised during the process. The Chairman will keep under review the frequency, scope and mechanisms for the evaluation process and amend the process as required. Where deficiencies are identified these will be addressed in a constructive manner. The evaluation process will be focused on the improvement of Board performance, through open and constructive dialogue and the development and implementation of action plans. Succession planning is a vital task for boards and the management of succession planning represents a key measure of the effectiveness of the Board. 12 Principle 8: Promote a culture that is based on ethical values and behaviours The Board recognises that a corporate culture based on sound ethical values and behaviours is an asset and a likely competitive advantage. The Board aims to lead by example and do what is in the best interests of the Company. Conducting its business in an ethical, professional and responsible manner, treating our employees, clients, suppliers and business partners with equal courtesy and respect at all times, are non-negotiables adopted by the Board and visible in the actions and decisions of the CEO and the rest of the management team. It is a key element in every aspect of the Group’s businesses, including recruitment, nominations, training and engagement. The Group’s performance and reward system endorses the desired ethical behaviours across the Company. Principle 9: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board The Board is responsible for the long-term success of the Company. The Board is intimately involved in all material decisions of the Company and its subsidiaries. It is responsible for overall Group and subsidiary strategy, approval of major investments; approval of the annual and interim results; annual budgets; dividend policy, and Board structure. It monitors the exposure to key business risks and reviews the strategic direction of all subsidiaries, their annual budgets and their performance in relation to those budgets. There is a clear division of responsibility at the head of the Company. The Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction. The CEO is responsible for proposing the strategic focus to the Board, implementing it once it has been approved and overseeing the management of the Company. The CEO is responsible for formulation of the proposed strategic focus for submission to the Board, the day-to-day management of the Group’s businesses and its overall trading, operational and financial performance in fulfilment of that strategy, as well as plans and budgets approved by the Board of Directors. He also manages and oversees key risks, management development and corporate responsibility programmes. The controls applied in respect of financial and non-financial matters are set out earlier in this document, and the effectiveness of these controls is regularly reported to the Board. Principle 10: Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders The Board is committed to maintaining good communication and having constructive dialogue with all of its stakeholders, including shareholders, providing them with access to information to enable them to come to informed decisions about the Company. The Investor Relations section of the Company’s website provides all required regulatory information as well as additional information shareholders may find helpful including: information on Board Members, Advisors and Significant Shareholdings, a historical list of the Company’s Announcements, Corporate Governance information, the Company’s publications including historic Annual Reports and Notices of General Meetings, together with Share Price information and interactive Charting facilities to assist shareholders analyse performance. Results of shareholder meetings and details of votes cast will be publicly announced through the regulatory system and displayed on the Company’s website with suitable explanations of any actions undertaken as a result of any significant votes against resolutions. Given the size of the Company, separate Audit committee meetings have not been held and an Audit committee or similar report was not produced. Instead the related issues were dealt with by the Company’s Board. Since the Directors did not receive any Remuneration during the year, no Remuneration Committee meeting was held and no Directors’ Remuneration report was applicable. ON BEHALF OF THE BOARD. PAUL TURNER CHAIRMAN 31 MARCH 2022 13 Report of the Independent Auditors For the year ended 31 August 2021 Report of the Independent Auditors, Baker Tilly Isle of Man LLC, to the members of Cambria Africa Plc OPINION We have audited the financial statements of Cambria Africa Plc (the ‘Parent company’) and its subsidiaries (the ‘Group’) for the year ended 31 August 2021 which comprise the Consolidated and Company Statements of Profit or Loss, the Consolidated and Company Statements of Comprehensive Income, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Statements of Financial Position, the Consolidated and Company Statements of Cash Flows and related 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 International Financial Reporting Standards (IFRSs) as adopted by the European Union. In our opinion the financial statements: • give a true and fair view of the state of the Group’s and the Parent Company’s affairs as at 31 August 2021, and of the results for the year then ended; and • have been properly prepared in accordance with IFRSs as adopted by the European Union. BASIS FOR OPINION We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ 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 responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. EMPHASIS OF MATTER We draw attention to the “Functional and Presentational Currency and the effect of Hyperinflation” section of Note 2 of the financial statements which describes the effects of the change in functional currency of a number of the Group entities and the subsequent hyperinflationary conditions which have prevailed during the financial year. Our opinion is not modified in relation to these matters. We note the disclosure made by the Directors in relation to the goodwill value that is recognised in the Consolidated Statement of Financial Position. We draw attention to Note 12 in relation to this issue. The model used by management in relation to the assessment for impairment is based upon the unaudited management accounts of Paynet Zimbabwe for the 6-month period following the financial year end (to 28 February 2022), to create a forward-looking valuation. If the Group does not achieve the levels of profitability predicted, then the need for an impairment of this figure may arise. Our opinion is not modified in relation to this matter. CONCLUSIONS RELATING TO GOING CONCERN We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where: • • the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or the directors have not disclosed in the financial statements 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 concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue. 14 OTHER INFORMATION The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’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 inconsistent 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 material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION In the light of our knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Chief Executive’s Report and the Directors’ Report. RESPONSIBILITIES OF DIRECTORS As explained more fully in the Directors’ Responsibilities Statement set out on page 7, 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 preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters 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 THE FINANCIAL STATEMENTS Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • • • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, 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 omissions, 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 purpose 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. 15 • • • 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 and the Parent Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required 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 of the Parent Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content 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 activities 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 regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. CAPABILITY OF THE AUDIT IN DETECTING IRREGULARITIES, INCLUDING FRAUD Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: • the we identified the laws and regulations applicable to the Company through discussions with Directors and other management, and from our commercial knowledge and experience of the sector; • we made specific requests of component auditors within the Group to determine their approach to detecting irregularities, including fraud and non-compliance with laws and regulations, and considered their findings as part of our approach; • we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including company law, taxation legislation, anti-bribery, environmental and health and safety legislation; • we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and • identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. We assessed the susceptibility of the Company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: • making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; • • considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and understanding the design of the Company’s remuneration policies. To address the risk of fraud through management bias and override of controls, we: • performed analytical procedures to identify any unusual or unexpected relationships; • we tested journal entries to identify unusual transactions; • assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and • investigated the rationale behind significant or unusual transactions. In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: • agreeing financial statement disclosures to underlying supporting documentation; 16 • • • reading the minutes of meetings of those charged with governance; enquiring of management as to actual and potential litigation and claims; and reviewing correspondence with tax authorities, relevant regulators and the company’s legal advisors. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the Directors and other management and the inspection of regulatory and legal correspondence, if any. Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. USE OF OUR REPORT This report is made solely to the Company’s members, as a body, in accordance with the terms of our engagement letter dated 21 January 2021. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. BAKER TILLY ISLE OF MAN LLC, CHARTERED ACCOUNTANTS, 2A LORD STREET, DOUGLAS, ISLE OF MAN, IM1 2BD 31 March 2022 17 Consolidated Statement of Profit or Loss For the year ended 31 August 2021 Revenue Cost of sales Gross profit Operating costs Other income Exceptionals Operating Profit / (Loss) Finance income Finance costs Net finance costs Profit/(Loss) before tax Income tax Profit/(Loss) for the period from continuing operations Discontinued operations Profit for the year from discontinued operations, net of tax Profit/(Loss) for the year Attributable to: Owners of the company Non-controlling Interests Profit/(Loss) for the year Earnings/(Loss) per share - all operations Basic and diluted earnings/(loss) per share (cents) Earnings/(Loss) per share - continuing operations Basic and diluted earnings/(loss) per share (cents) Earnings/(Loss) per share - discontinued operations Basic and diluted earnings per share (cents) GROUP 2021 TOTAL US$’000 GROUP 2020 TOTAL US$’000 1,216 (138) 1,078 (838) 79 (21) 298 - (22) (22) 276 (95) 181 - 181 82 99 181 0.02c 0.02c - 1,319 (519) 800 (845) 55 (375) (365) 1 (60) (59) (424) (46) (470) - (470) (408) (62) (470) (0.07c) (0.07c) - NOTE 5 6 6 8 8 9 5 10 10 10 The notes on pages 26 to 59 are an integral part of these consolidated financial statements. 18 Company Statement of Profit or Loss For the year ended 31 August 2021 Revenue Cost of sales Gross profit Operating costs Other income Exceptionals Operating (loss) Finance income Finance costs Net finance costs (Loss)before tax Income tax (Loss) for the period from continuing operations Discontinued operations Profit /(loss) for the year from discontinued operations, net of tax (Loss) for the year Attributable to: Owners of the company Non-controlling Interests (Loss) for the year (Loss) per share - all operations Basic and diluted (loss) per share (cents) (Loss) per share - continuing operations Basic and diluted (loss)/earnings per share (cents) (Loss) per share - discontinued operations Basic and diluted (loss) per share (cents) The notes on pages 26 to 59 are an integral part of these consolidated financial statements. COMPANY 2021 TOTAL US$’000 - - - (147) 4 - (143) - (21) (21) (164) - (164) COMPANY 2020 TOTAL US$’000 - - - (224) 22 (188) (390) - (47) (47) (437) - (437) - (164) (164) - (164) (0.03c) (0.03c) - - (437) (437) - (437) (0.08c) (0.08c) - 19 Consolidated & Company Statements of Comprehensive Income For the year ended 31 August 2021 Consolidated Profit/(Loss) for the year Other comprehensive income Items that will not be reclassified to Statement of Profit or Loss: Increase in investment in subsidiary – impact on equity Foreign currency translation differences for overseas operations Total comprehensive profit/(loss) for the year Attributable to: Owners of the company Non-controlling interest Total comprehensive profit/(loss) for the year Company (Loss) for the year Other comprehensive income Items that will not be reclassified to Statement of Profit or Loss: Foreign currency translation differences for overseas operations Total comprehensive (loss) for the year Attributable to: Owners of the company Non-controlling interest Total comprehensive (loss) for the year The notes on pages 26 to 59 are an integral part of these consolidated financial statements. GROUP 2021 US$’000 181 GROUP 2020 US$’000 (470) - (4) 177 78 99 177 (74) (511) (1,055) (993) (62) (1,055) COMPANY 2021 US$’000 (164) - (164) (164) - (164) COMPANY 2020 US$’000 (437) - (437) (437) - (437) 20 Consolidated Statement of Changes in Equity For the year ended 31 August 2021 ` Balance at 1 September 2020 Profit for the year Increase in investment in subsidiary - Revaluation of investment property held at fair value Foreign currency translation differences for overseas operations Foreign currency translation differences for overseas operations – NCI Contributions by/distributions to owners of the Company recognised directly in equity Dividends paid to minorities Total contributions by and distributions to owners of the Company SHARE CAPITAL US$’000 77 SHARE PREMIUM US$’000 88,459 - - - - - - REVALUA- TION RESERVE US$’000 - - (190) FOREIGN EXCHANGE RESERVE ACCUMU- LATED LOSSES US$’000 (10,736) US$’000 (73,748) NDR US$’000 2,371 - - 82 - - - - - - (4) - 77 - 88,459 - (190) 6 (10,734) - (73,666) - 2,371 - - - - - - - - - - - - TOTAL US$’000 6,423 82 (190) (4) 6 6,317 - - Balance at 31 August 2021 77 88,459 (190) (10,734) (73,666) 2,371 6,317 SHARE CAPITAL SHARE PREMIUM RE-VALUA- TION RESERVE FOREIGN EXCHANGE RESERVE ACCUMU- LATED LOSSES NDR TOTAL Balance at 1 September 2019 US$’000 77 US$’000 88,459 US$’000 US$’000 US$’000 US$’000 - (10,251) (73,266) 2,371 NON-CON TROLLING INTERESTS US$’000 496 99 - - (6) 589 TOTAL US$’000 6,919 181 (190) (4) - 6,906 (112) (112) (112) 477 (112) 6,794 NON-CON TROLLING INTERESTS US$’000 747 (62) (137) - TOTAL US$’000 8,137 (470) (211) (511) US$’000 7,390 (408) (74) (511) - - - - - - - - - - - - - (511) - 26 (408) (74) - - - - - - 77 88,459 - (10,736) (482) 2,371 (967) (225) (1,192) 26 (26) - Loss for the year Increase in investment in subsidiaries Foreign currency translation differences for overseas operations Foreign currency translation differences for overseas operations - (NCI) Contributions by/distributions to owners of the Company recognised directly in equity Dividends paid to minorities Total contributions by and distributions to owners of the Company Balance at 31 August 2020 77 88,459 - - - - - - - - - - - - - - - (10,736) (73,748) 2,371 6,423 (26) (26) 496 (26) (26) 6,919 The notes on pages 26 to 59 are an integral part of these consolidated financial statements. 21 Company Statement of Changes in Equity For the year ended 31 August 2021 Balance at 1 September 2020 Foreign Currency revaluation on overseas operations (Loss) for the year Total comprehensive loss for the year Balance at 31 August 2021 Balance at 1 September 2019 Loss for the year Total comprehensive profit for the year Balance at 31 August 2020 SHARE CAPITAL US$’000 77 - - - 77 SHARE CAPITAL US$’000 77 - - 77 ACCUMULATED LOSSES TOTAL EQUITY SHARE PREMIUM US$’000 88,459 - - - 88,459 SHARE PREMIUM US$’000 88,459 - - FOREIGN EXCHANGE RESERVE US$’000 (13,186) - - - FOREIGN EXCHANGE RESERVE US$’000 (13,186) - - US$’000 (73,489) - (164) (164) US$’000 (73,052) (437) (437) 88,459 (13,186) (73,489) (13,186) (73,653) ACCUMULATED LOSSES TOTAL EQUITY The notes on pages 26 to 59 are an integral part of these consolidated financial statements. US$’000 1,861 - (164) (164) 1,697 US$’000 2,298 (437) (437) 1,861 22 GROUP 2020 US$’000 COMPANY 2020 US$’000 Consolidated and Company Statement of Financial Position As at 31 August 2021 Property, plant and equipment Goodwill Intangible assets Investments in subsidiaries and investments at fair value Financial assets at fair value through profit and loss Total non-current assets Inventories Financial assets at fair value through profit and loss Trade and other receivables Cash and cash equivalents Total current assets Total assets Equity Issued share capital Share premium account Revaluation reserve Foreign exchange reserve Non-distributable reserves Accumulated losses Equity attributable to owners of the company Non-controlling interests Total equity Liabilities Loans and borrowings Trade and other payables Provisions Deferred tax liabilities Total non-current liabilities Current tax liabilities Loans and borrowings Trade and other payables Total current liabilities Total liabilities Total equity and liabilities NOTES 11 12 13 14 16 15 16 17 18 20 20 19 19 19 22 22 23 24 26 25 26 GROUP 2021 US$’000 2,317 717 1 2,228 184 5,447 158 75 155 1,656 2,044 7,491 77 88,459 (190) (10,734) 2,371 (73,666) 6,317 477 6,794 - 90 - 189 279 107 101 210 418 697 7,491 COMPANY 2021 US$’000 - - - - 184 184 - - 3,015 269 3,284 3,468 77 88,459 - (12,600) - (74,240) 1,696 - 1,696 - - - - - - 101 1,671 1,772 1,772 3,468 2,604 717 1 2,228 201 5,751 102 16 151 1,896 2,165 7,916 77 88,459 - (10,736) 2,371 (73,748) 6,423 496 6,919 - 22 1 193 216 38 509 234 781 997 7,916 These financial statements were approved by the Board of Directors and authorised for issue on 31 March 2022. They were signed on their behalf by: MR. S SHASHA EXECUTIVE DIRECTOR The notes on pages 26 to 59 are an integral part of these consolidated financial statements. - - - - 201 201 - - 3,069 233 3,302 3,503 77 88,459 - (13,186) - (73,489) 1,861 - 1,861 - - - - - - 500 1,142 1,642 1,642 3,503 23 Consolidated Statement of Cash Flows As at 31 August 2021 Cash generated from operations Taxation (paid) Cash generated from operating activities Cash flows from investing activities Proceeds on disposal of property, plant and equipment Purchase of property, plant and equipment Net proceeds from marketable securities Other investing activities Interest received Net cash (utilized in)/ generated investing activities Cash flows from financing activities Dividends paid to non-controlling interests Interest paid Proceeds from issue of share capital Loans repaid Proceeds from drawdown of loans Net cash (utilized) by financing activities Net (decrease)/ increase in cash and cash equivalents Cash and cash equivalents at the beginning of the Period Foreign exchange Net cash and cash equivalents at 31 August Cash and cash equivalents as above comprise the following Cash and cash equivalents attributable to continuing operations Net cash and cash equivalents at 31 August GROUP 2021 US$’000 GROUP 2020 US$’000 202 (31) 171 134 - - - - 134 (112) (22) - (407) - (541) (236) 1,896 (4) 1,656 1,656 1,656 605 (43) 562 37 - 226 (210) 1 54 (26) (60) - (88) 45 (129) 487 1,920 (511) 1,896 1,896 1,896 NOTES 27 22, 25 22, 25 18 18 The notes on pages 26 to 59 are an integral part of these consolidated financial statements. 24 Company Statement of Cash Flows For the year ended 31 August 2021 Cash generated from/(utilized in) operations Taxation paid Cash generated from/(utilized in) operating activities Cash flows from investing activities Net proceeds from marketable securities Net cash generated from/(utilized in) investing activities Cash flows from financing activities Interest paid Proceeds from new borrowings Loans repaid Net cash (utilized in)/ generated from by financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the Period Foreign exchange Net cash and cash equivalents at 31 August Cash and cash equivalents as above comprise the following Cash and cash equivalents attributable to continuing operations Net cash and cash equivalents at 31 August COMPANY 2021 US$’000 457 - 457 - - (21) - (400) (421) 36 233 - 269 269 269 NOTES 27 22, 25 22, 25 18 18 COMPANY 2020 US$’000 (450) - (450) 226 226 (47) 57 - 10 (214) 447 - 233 233 233 The notes on pages 26 to 59 are an integral part of these consolidated financial statements. 25 Notes to the Financial Statements For the year ended 31 August 2021 1. Reporting entity Cambria Africa Plc (the “Company”) is a public limited company listed on the Alternative Investment Market (AIM) and incorporated and domiciled in the Isle of Man under the Companies Act 2006. The consolidated financial statements of the Group for the year ended 31 August 2021 comprise the Company and its subsidiaries (together referred to as the “Group” and individually as “Group entities”). The majority shareholder is Ventures Africa Limited, the ultimate controlling entity is S Shasha and Associates and the ultimate beneficial owner Mr. S Shasha. The financial statements were authorised for issue by the Directors on 31 March 2022. 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 EU, and the Isle of Man Companies Act 2006. ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS NEW AMENDMENTS TO IFRSs THAT ARE MANDATORILY EFFECTIVE FOR THE CURRENT YEAR. In the current year, the Group has applied the following new amendments to IFRSs issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2020: • • • • • Amendments to IFRS 3: Definition of a business Amendments to IFRS 7, IFRS 9 and IAS 39 Interest Rate Benchmark Reform Amendments to IAS 1 and IAS 8 Definition of Material Conceptual Framework for Financial Reporting issued on 29 March 2018 Amendments to IFRS 16 COVID – 19 Related Rent Concessions The transition to these standards had no material impact on the Group. NEW AMENDMENTS TO IFRSs THAT ARE NOT YET EFFECTIVE FOR THE CURRENT YEAR. At the date of authorisation of these financial statements, the following new amendments to IFRSs issued by the International Accounting Standards Board (IASB), were in issue but not yet effective, and have not been early adopted by the Group: • • • IFRS 17 Insurance Contracts (effective on or after 1 January 2023) Amendments to IAS 1: Classification of Liabilities as Current or Non-current (effective on or after 1 January 2023) Reference to the Conceptual Framework – Amendments to IFRS 3 (effective on or after 1 January 2022) Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16 (effective on or after 1 January 2022) • Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37 (effective on or after 1 January 2022) • IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time adopted (effective on or after 1 January 2022) IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities (effective on or after 1 January 2022) IAS 41 Agriculture – Taxation in fair value measurements (effective on or after 1 January 2022) • • The Group have reviewed the IFRS standards in issue which are effective for annual accounting years ending on or after the stated effective date. None of these standards would have a material impact on the financial statements of the Group. 26 Notes to the Financial Statements For the year ended 31 August 2021 BASIS OF MEASUREMENT The consolidated financial statements have been prepared on the historical cost basis except for the following: • land and buildings measured at revalued amounts. FUNCTIONAL AND PRESENTATIONAL CURRENCY AND THE EFFECT OF HYPERINFLATION In February 2019, the Group’s Zimbabwean entities experienced a change in functional currency from USD to ZWL with immediate effect. The Group carried out an assessment of change in functional currency which included consideration of whether the various modes of settlement may represent different forms of currency. In doing so, management considered parameters set in IAS 21 as follows: • • • • • The currency that mainly influences the sales prices for goods and services, The currency of competitive forces and regulations that mainly determines the sales prices of goods and services, The currency that mainly influences labour, material and other costs of providing goods and services (normally the currency in which such costs are denoted and settled), The currency in which funds from financing activities are generated, and The currency in which receipts from operating activities are usually retained. Since 2009, Zimbabwe has been under a multi-currency system, under which the USD has emerged as the currency of reference for business and government. New legislation was promulgated in the form of Statutory Instruments 133 of 2016 and 122a of 2017 which prescribed bond notes and coins issued by the Reserve Bank of Zimbabwe as legal tender with a 1:1 parity with the USD. With the acute shortage of USD cash and other foreign currencies in the country, increases in the utilisation of different modes of payment for goods and services such as settlement via the Real Time Gross Settlement (RTGS) system overseen by the Reserve Bank of Zimbabwe (RBZ), Point of sale machines (POS) and mobile money platforms, were observed. In October 2018 the Central Bank through the Exchange Control directive RT120 introduced the separation of bank accounts into Nostro foreign currency account (herein referred as Nostro) and the existing foreign currency accounts for domestic purposes. These Nostro accounts are held with financial institutions operating in Zimbabwe in which money in the form of foreign currency is deposited from offshore or domestic sources. The separation of the pre-existing FCA and Nostro accounts suggested that in substance the values were not equal. Since the 1st of October 2018, Zimbabwe witnessed significant changes in the economy, with the economy being characterized by a highly inflationary environment. On 22 February 2019, the Government of Zimbabwe through Statutory instrument 33 of 2019 introduced the RTGS dollar as a base currency as part of its 2019 first quarter monetary policy. This was later followed by the promulgation of Statutory Instrument 142 of 24th of June 2019, which banned the use of multicurrency system and made the Zimbabwe Dollar (ZWL) the only legal tender to be used for settling local transactions. The Consolidated Financial Statements are presented in US Dollars (USD), the Group’s presentational currency. With effect from 22 February 2019, all its Zimbabwe subsidiaries have adopted the US Dollar as presentational currency with Zimbabwe‘s Dollar (ZWL) as the functional currency. Up to 22 February 2019, all cumulative Statement of Profit or Loss transactions, assets, liabilities and equity balances were translated at ZWL1.00:USD1.00 and any local transactions thereafter treated as ZWL transactions. For the Company’s USD reporting purposes, transactions up to 22 February 2019 were maintained in USD. In accordance with guidance issued by the PAAB of Zimbabwe, the country is a hyperinflationary economy effecting reporting periods ending after 01 July 2019. This guidance still stands in place for the financial year ended 31 August 2021. Accordingly, all ZWL transactions during this financial year have first been adjusted for Hyperinflationary conditions in terms of IAS 29 using historic cost basis and official inflation price indexes published by the Reserve Bank of Zimbabwe, before translation at the official interbank rate at the financial year end. The inflation price indices rose from an index of 2,205.24 at the beginning of the year to an index of 3,191.19 at the end of the year. The net monetary gain/loss was not material and is included directly in reserves. At 31 August 2021, all monetary ZWL asset and liability balances of its Zimbabwe subsidiaries were converted at the closing auction rate of ZWL85.91:USD1.00. Non-monetary assets were recorded in accordance with the provisions of IAS 29 before conversion at the year-end rate in accordance with paragraphs 42 and 43 of IAS 21. The Statement of Financial Position was unaffected by IAS 29. Resultant 27 Notes to the Financial Statements For the year ended 31 August 2021 foreign exchange translation differences were accounted for through the foreign currency translation reserve in the Statement of Other Comprehensive Income. USE OF ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with IFRSs requires management to make judgement, 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 judgement 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 following notes: • Note 12 – Goodwill • Note 11 – Property, plant and equipment • Note 23 – Provisions By their nature, these estimates and assumptions are subject to an inherent measurement of uncertainty and the effect on the Group’s financial statements of changes in estimates in future periods could be significant. GOING CONCERN The Zimbabwean economy was adverse towards business during the current year. The official exchange rate depreciated from ZWL83.40:USD1.00 at the beginning of the year to ZWL85.91 as at 31 August 2021. This was not reflective of the overall inflation in the market that was driven by the parallel exchange rates that were used more for pricing mechanisms. The company continued with its conservative approach. Overheads reduced in the 2021 financial year by 1% while revenue declined by 8%. The bulk of the revenue in the year came from Payserv which constitutes turnover of $648,000 from the Autopay business and $489,000 from Tradanet. We believe that Tradanet will perform solidly in the coming year due to increase in microloans being processed through CABS because of a rise in general salaries which will give the workforce more power to borrow. The company engaged a management team from Propay (Private) Limited, a similar business, to manage the affairs of Autopay. With a management team that is more experienced with both operations and client service, we believe that the business will arrest the loss of clients and retain its market share. This new team is already showing a more positive trend in the business. Millchem Zimbabwe operated the joint venture with Merken (Private) Limited in the current year. This brought about turnover of $78,000 in the 2021 financial year. The performance of this joint venture is being closely monitored and if management believe there is no significant value coming out of that operation it may be shut down. The Group reported a decrease in Net asset value (NAV) of 1.63% to $6.32 million from $6.42 million at 31 August 2020. Liabilities include Loans and Borrowings of $101,000 which is owed to Cambria’s majority shareholder, VAL which is beneficially owned by the Group CEO. The vast majority of the Company’s assets are represented by tangible assets in the form of Investment Property, AF Philip’s Investment in Radar Holdings Ltd, Listed Securities and US Dollar cash and equivalents. These assets retain their value in real US Dollar terms. The Group held cash of $1.7 million at 31 August 2021. At the date of this report $1.3 million cash is held outside Zimbabwe. The Board has considered the cash flow forecasts for the ensuing 12 months including the maturity profile of its contractual debt obligations. Considering the quality of the Group’s Statement of Financial Position, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. 28 Notes to the Financial Statements For the year ended 31 August 2021 Accordingly, they continue to adopt the going concern basis in preparing the annual report and financial statements. The Group’s business activities and financial performance are set out in the Chief Executive’s Review on pages 4 to 5. In addition, note 28 to the financial statements includes the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and its exposure to credit and liquidity risk. 3. Significant accounting policies The following accounting policies have been applied consistently 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 statements 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 recognised. 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 Statement of Profit or Loss from the effective date of acquisition or up to the effective date of disposal as appropriate. Where necessary, the financial statements of the subsidiaries are adjusted to conform to the Group’s accounting policies. All intra-group transactions, balances, income and expenses are eliminated on consolidation. BUSINESS COMBINATIONS The acquisition of subsidiaries is accounted for using the acquisition 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 acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date, except for non- current assets that are classified as held for sale in accordance 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 initially measured at cost, being the excess of the cost of the business combination over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities recognised. 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 excess is recognised immediately in the Statement of Profit or Loss. 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 liabilities 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 accumulated impairment losses. The recoverable amount is estimated at each reporting date. 29 Notes to the Financial Statements For the year ended 31 August 2021 Any impairment loss is recognised immediately in the Statement of Profit or Loss 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. Goodwill is considered to have an indefinite useful life, and subject to annual impairment reviews. 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 impairment where necessary. On a business combination, as well as recording separable intangible 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. Amortisation of intangible assets, disclosed under operating costs in note 6, is charged over their useful economic life, as follows: Item Software licenses (C) FOREIGN CURRENCIES Useful life 3 years The Consolidated Financial Statements are presented in US Dollars (USD), the Group’s presentation currency. With effect from 22 February 2019, all its Zimbabwe subsidiaries have adopted the US Dollar as presentation currency with Zimbabwe ‘s Dollar (ZWL) as the functional currency. In preparing the financial statements of the individual Group entities, transactions denominated in foreign currencies are translated into the respective functional currency of the individual Group entities using the exchange rates prevailing at the dates of transactions. Non-monetary assets and liabilities are translated at the historic rate. Monetary assets and liabilities denominated in foreign currencies are translated into the presentation currency at the auction rate of exchange ruling at the reporting date. Exchange differences arising on the settlement of monetary items are included in the Statement of Profit or Loss for the year, as either finance income, finance costs or exceptionals depending on whether foreign currency movements are in a net gain or net loss position. For the purpose of presenting consolidated financial statements, the assets and liabilities and results of the Group’s foreign operations are translated from their functional currency to presentation currency, as disclosed in note 2. (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 Statement of Profit or Loss 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 enacted 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 liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted 30 Notes to the Financial Statements For the year ended 31 August 2021 for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on the investments in subsidiaries and associates, 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. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited in the Statement of Profit or Loss, except when it relates to items charged or credited to equity, in which case the deferred tax is also dealt with in equity. 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 reporting date. Any revaluation increase arising on the revaluation of such assets is credited to the revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised as an expense, in which case the increase is credited to the Statement of Profit or Loss 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. Depreciation on revalued assets is charged to the Statement of Profit or Loss. On subsequent sale or retirement of a revalued asset, the attributable revaluation surplus remaining is transferred directly to retained earnings. Depreciation is charged straight line so as to write off the cost or valuation of assets, other than land and buildings, over their estimated useful lives. The annual depreciation rates used for this purpose are: Plant and machinery Motor vehicles Fixtures and fittings 10% 25% 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 Statement of Profit or Loss for the year. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets, or where shorter, over the relevant lease term. No depreciation is provided on land and buildings. Property, plant and equipment identified for disposal are reclassified as assets held for resale. 31 Notes to the Financial Statements For the year ended 31 August 2021 (H) IMPAIRMENT OF ASSETS EXCLUDING GOODWILL At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of any impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Recoverable amount is the higher of fair value 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 asset 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 increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. (I) FINANCIAL INSTRUMENTS Non-derivative financial instruments comprise investments in equity, trade and other receivables, cash and cash equivalents, loans and borrowings and trade and other payables. Financial assets and financial liabilities are recognised in the Group’s Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. (A) CLASSIFICATION AND MEASUREMENT Following the Group’s adoption of IFRS 9 there were no material changes to the classification and measurement of financial instruments. The Group has therefore adopted following: All financial assets continue to be measured at fair value. • • Financial assets previously classified as loans and receivables are held to collect contractual cash flows and give rise to cash flows representing solely payments of principal and interest. Thus, such instruments continue to be measured at amortised cost under IFRS 9. The classification of financial liabilities under IFRS 9 remains broadly the same as under IAS 39. The main impact on measurement from the classification of liabilities under IFRS 9 relates to the element of gains or losses for financial liabilities designated as at fair value through profit or loss attributable to changes in credit risk. IFRS 9 requires that such element can be recognised in other comprehensive income (OCI), unless this treatment creates or enlarges an accounting mismatch in profit or loss, in which case, all gains and losses on that liability (including the effects of changes in credit risk) should be presented in profit or loss. The Group has not designated any financial liabilities at fair value through profit or loss, therefore, this requirement has not had an impact on the Group. (B) IMPAIRMENT IFRS 9 requires the Group to record expected credit losses (ECLs) on all of its debt securities, loans and trade receivables, either on a 12-month or lifetime basis. Given the limited exposure of the Group to credit risk, this amendment has not had a material impact on the financial statements. The Group only holds trade receivables with no financing component and that have no maturities less than 12 months at amortised cost. Financial assets carried at fair value continue to be considered for impairment at the reporting date. 32 Notes to the Financial Statements For the year ended 31 August 2021 (C) HEDGE ACCOUNTING The Group has not applied hedge accounting under IFRS 9. 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 subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. TRADE RECEIVABLES Trade receivables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated recoverable 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 subsequently measured at amortised cost using the effective interest rate method. FINANCIAL LIABILITIES Financial liabilities are classified according to the substance of the contractual arrangements entered into. CAPITAL MANAGEMENT The 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 sustain future development of the business. BANK BORROWINGS Interest bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an amortised cost basis to the Statement of Profit or Loss using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. EQUITY INSTRUMENTS Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. (J) INVENTORIES Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and where applicable direct expenditure and attributable overheads that have been incurred 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 incurred 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 instruments 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 dilution in the computation of earnings per share. 33 Notes to the Financial Statements For the year ended 31 August 2021 The grant date fair value of options granted to employees is recognised as an employee expense with a corresponding increase in equity over the period the employees become unconditionally entitled to the options. (L) INTEREST-BEARING BORROWINGS Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in the Statement of Profit or Loss over the period of the borrowings 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 IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue is recognised when a customer obtains control of the goods and services. Determining the timing of the transfer of control at a point in time or over time requires judgement. IFRS 15 provides a single, principles based, five-step model to be applied to all contracts with customers. The five steps in the model are as follows: Identify the contract with the customer; Identify the performance obligations in the contract; • • • Determine the transaction price; • • Allocate the transaction price to the performance obligations in the contracts; and Recognise revenue when (or as) the entity satisfies a performance obligation. Applying the five-step model: Revenue generated from contracts with Fintech customers: • • Loan processing services are performed under an agreement with Autopay’s payroll services are provided under short-term contracts with its clients. Details are disclosed under note 5 (Segment Reporting). The Group loan processing and payroll administration during FY 2021: • The transaction price is as stipulated in the contract with the customer. It is stated at a price per transaction processed that varies based upon the volume or value of transactions processed. • Monthly invoices are raised based on the total number or value of transactions processed by the financial institutions or other customers in that given month. The Group recognises revenue as and when it becomes due, pursuant to the agreements. • When there are variations in contract work, claims or incentive payments revenue is recognised to the extent that it is probable that they will result in revenue and they are capable of being reliably measured. The Group does not have any revenue from contracts that is recognised over a period of time as such no disaggregation is made regarding the timing of revenue in the notes to these financial statements. Revenue from the sale of goods is recognised when all the following conditions have been satisfied: • • • the group has transferred to the buyer the significant risks and rewards of ownership of the goods; the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; the amount of revenue can be measured reliably; 34 Notes to the Financial Statements For the year ended 31 August 2021 • • it is probable that the economic benefits associated with the transaction will flow to the group; and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Interest is recognised, in profit or loss, using the effective interest rate method. (O) LEASES The Group does not have any leases exceeding 12 months and hence the impact of IFRS 16 is very limited. Leases are classified according to the substance of the transaction. A lease that transfers substantially all the risks and rewards of the ownership to the lessee is classified as a finance lease. All other leases are classified as operating leases. Operating lease rentals are charged in the Statement of Profit or Loss on a straight-line basis over the period of the lease (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. (Q) SEGMENT REPORTING A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment), which is subject 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-distribution 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-distribution, 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 measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated 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 re-measurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss. Once classified as held-for-sale or held-for-distribution, intangible 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 business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which: • • • represents a separate major line of business or geographical area of operations; is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs on disposal or when the operation meets the criteria to be classified as held- for-sale, if earlier. 35 Notes to the Financial Statements For the year ended 31 August 2021 When an operation is classified as a discontinued operation, the comparative statement of comprehensive income is represented as if the operation had been discontinued from the start of the comparative year. 4. Determination of fair values A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non- financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. 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. 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 market rate of interest at the measurement date. Short-term receivables with no stated interest rate are measured at the original invoice amount if the effect of discounting is immaterial. Fair value is determined at initial recognition and, for disclosure purposes, at each annual reporting date. PROPERTY, PLANT AND EQUIPMENT The fair value of property, plant and equipment recognised 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 parties 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 adjustments 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. 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 knowledgeably. In the absence of current prices in an active market, the valuations are prepared by considering the estimated rental value 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. Although external valuations are obtained, the Directors also review the valuations and may determine the need for impairment for the financial statements given their own knowledge of the properties and in particular where there has been interest from third parties in purchasing the properties, the Directors may refer to amounts offered for purchase. INVESTMENTS AT FAIR VALUE The fair value of the Group’s investments in marketable securities are determined with reference to the last traded market prices on the relevant exchange on which they trade. The fair value of the investment in Radar Holdings Limited (Radar), held through subsidiary AF Philip Pvt Ltd, is determined with reference to the Board’s assessment of its market value on a willing- buyer-willing-seller basis. Specific reference is made to known negotiations or offers received for Radar shares. As a further reasonability test, the Net Asset Value of Radar, extracted from its published accounts and management accounts is compared to the Board’s assessment of the fair value of its shares. 36 Notes to the Financial Statements For the year ended 31 August 2021 5. Segment reporting Segment information is presented in respect of the Group’s business segments based on the Group’s management and internal reporting structure. The results of the business segments are reviewed regularly by the Group’s CEO to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. Inter-segment pricing is determined on an arm’s length basis and inter-segment revenue is eliminated. Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly interest-bearing loans, borrowings and expenses, and corporate assets 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 Fintech and industrial chemicals, now operate solely in Zimbabwe. Separate geographical analysis is therefore not presented. BUSINESS SEGMENTS For management purposes, continuing operations are organised into three main business segments: Fintech – includes payments systems and business process outsourcing and payroll services; Industrial chemicals – includes the manufacture of sanitisers through a joint venture arrangement; • • • Head office. CONTRACTUAL REVENUE AND MATERIAL CUSTOMERS Tradanet, Paynet Zimbabwe’s 51% subsidiary provides loan origination and administration services to CABS under a 3-year contract. This contractual revenue amounted to $489,000 in FY 2021 (FY 2020: $183,000). Paynet Zimbabwe’s Payroll services business Autopay, provided outsourced payroll services under short-term contracts with clients to the value of $648,000 in FY 2021 (FY 2020: $382,000). Revenue through the CABS relationship represented 40% of FY 2021 of Consolidated Revenue (FY 2020: 14%). No other revenue is earned by the Group under contracts. 37 Notes to the Financial Statements For the year ended 31 August 2021 5. Segment reporting continued CONTINUING OPERATIONS – CURRENT PERIOD FOR THE YEAR ENDED 31 AUGUST 2021 Revenue Inter-segment revenue Revenue from external customers Cost of sales to external customers Gross profit Operating costs Other operating income Fair value adjustments Depreciation Amortisation Operating profit / (loss) for the year Finance income Finance expense Income tax expense Profit / (loss) for the year EBITDA * CONTINUING OPERATIONS – PRIOR PERIOD FOR THE YEAR ENDED 31 AUGUST 2020 Revenue Inter-segment revenue Revenue from external customers Cost of sales to external customers Gross profit Operating costs Other operating income Impairment of assets Depreciation Amortisation Operating profit / (loss) for the year Finance income Finance expense Income tax expense Profit / (loss) for the year EBITDA * INDUSTRIAL CHEMICALS US$’000 FINTECH HEAD OFFICE US$’000 US$’000 TOTAL US$’000 79 - 79 (40) 39 (31) 3 - - - 11 - - 8 19 11 1,137 - 1,137 (98) 1,039 (606) 72 297 (50) - 752 - (1) (99) 652 505 - - - - - (151) 4 (318) - - (465) - (21) (4) (490) (147) 1,216 - 1,216 (138) 1,078 (788) 79 (21) (50) - 298 - (22) (95) 181 369 INDUSTRIAL CHEMICALS US$’000 FINTECH US$’000 HEAD OFFICE US$’000 TOTAL US$’000 596 - 596 (383) 213 (85) 12 - (13) - 127 - - (14) 113 140 723 - 723 (136) 587 (386) 21 (7) (135) (2) 78 1 (13) (32) 34 222 - - - - - (224) 22 (368) - - (570) - (47) - (617) (202) 1,319 - 1,319 (519) 800 (695) 55 (375) (148) (2) (365) 1 (60) (46) (470) 160 * Earnings before Interest, Taxation, Depreciation and Amortisation. Adjusted for depreciation that is included in cost of sales. 38 Notes to the Financial Statements For the year ended 31 August 2021 5. Segment reporting continued DISCONTINUED OPERATIONS There were no discontinued operations in the current period. CONTINUING OPERATIONS – SEGMENT ASSETS & LIABILITIES FOR THE YEAR ENDED 31 AUGUST 2021 Segment assets Segment liabilities Capital expenditure FOR THE YEAR ENDED 31 AUGUST 2020 Segment assets Segment liabilities Capital expenditure INDUSTRIAL CHEMICALS US$’000 180 22 - INDUSTRIAL CHEMICALS US$’000 173 40 - FINTECH US$’000 4,536 311 - FINTECH US$’000 4,777 204 - HEAD OFFICE US$’000 2,776 362 - HEAD OFFICE US$’00 2,966 753 - TOTAL US$’000 7,492 695 - TOTAL US$’000 7,916 997 - ASSETS AND LIABILITIES HELD FOR SALE There were no assets or liabilities held for sale as at 31 August 2021. 6. Group net operating costs Cost of sales Administrative expenses Net operating costs Administrative expenses include management related overheads for continuing operations and head office. 2021 US$’000 138 838 976 2020 US$’000 519 845 1,364 Operating costs include, inter alia: Depreciation of property, plant and equipment Depreciation of property plant and equipment in cost of sales Amortisation Operating lease rentals: Land and buildings Personnel expenses Auditors remuneration Fees Payable to the Group Auditors for: Current year audit of the Group’s financial statements NOTE 2021 US$’000 2020 US$’000 50 - 1 34 311 30 138 9 1 27 261 30 7 39 Notes to the Financial Statements For the year ended 31 August 2021 Personnel expenses 7. The aggregate remuneration comprised (including Executive Directors): Wages and salaries Compulsory social security contributions Total personnel expenses REMUNERATION OF GROUP EXECUTIVE DIRECTORS Please see Directors’ emoluments note 32. PENSION FUNDS 2021 US$’000 309 2 311 2020 US$’000 257 4 261 The group provides for pensions on the retirement of employees by means of the compulsory Zimbabwean National Social Security Authority (NSSA) fund and the Cambria Staff Pension fund administered on our behalf by Old Mutual. Contributions for the year were as follows: COMPANY US$’000 EMPLOYEES US$’000 2 - 2 2 - 2 2021 NUMBER 9 1 2 12 TOTAL US$’000 4 - 4 2020 NUMBER 35 10 2 47 2021 NSSA Cambria Staff Pension Fund Total The average number of employees (including Executive Directors) in continuing operations was: Fintech Industrial chemicals Head Office Total 8. Net finance costs Recognised in Statement of Profit or Loss: Bank interest receivable Finance income Bank interest payable Loan interest payable Finance costs Net finance costs 2021 US$’000 2020 US$’000 - - - (22) (22) (22) 1 1 - (60) (60) (59) 40 Notes to the Financial Statements For the year ended 31 August 2021 9. Taxation Income tax recognized in the Statement of Profit or Loss Current tax expense Current period Deferred tax expense Origination and reversal of temporary differences Total income tax charge in Statement of Profit or Loss Profit before tax Income tax using the Zimbabwean corporation tax rate 24.72% (2020: 24.72%) Net losses where no group relief is available Total income tax charge in Statement of Profit or Loss DEFERRED TAX Relating to temporary tax differences in subsidiaries Total 2021 US$’000 88 7 95 2021 US$’000 276 (68) (27) (95) 2021 US$’000 7 7 2020 US$’000 57 (11) 46 2020 US$’000 (424) (105) 151 46 2020 US$’000 11 11 Corporation tax for Zimbabwean entities is calculated at 24.72% (2020: 24.72%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. Deferred tax assets are only recognised to the extent that there are available & offsetting deferred tax liabilities, unless the entity is reasonably assured of earning sufficient future profits to offset against any future tax liabilities. 10. Earnings per share The calculation of basic and diluted earnings per share at 31 August 2021 has been based on the earnings attributable to ordinary shareholders for continuing and discontinued operations at the weighted average of ordinary shares outstanding during the period as detailed in the table below: EARNINGS ATTRIBUTABLE TO ORDINARY SHAREHOLDERS Earnings/(Loss) for the purposes of basic earnings and dilutive per share being net earnings attributable to equity holders of the parent - continuing operations - discontinued operations WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Weighted average number of ordinary shares for the purposes of calculating basic and dilutive earnings per share Actual number of shares outstanding at the end of the period 2021 EARNINGS PER SHARE US$ CENTS 2020 EARNINGS PER SHARE US$ CENTS 2021 US$’000 2020 US$’000 0.02 0.02 - 82 82 - (0.07) (0.07) - (408) (408) - NOTE 20 2021 000’S 544,576 544,576 2020 000’S 544,576 544,576 41 Notes to the Financial Statements For the year ended 31 August 2021 11. Property, plant and equipment 2021 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 2020 Additions in year Revaluations Disposals in year Balance at 31 August 2021 Accumulated depreciation At 1 September 2020 Disposals in year Depreciation charge for the year Balance at 31 August 2021 Carrying amounts At 31 August 2021 At 31 August 2020 2020 GROUP Cost or valuation At 1 September 2019 Additions in year Revaluations Disposals in year Balance at 31 August 2020 Accumulated depreciation At 1 September 2019 Disposals in year Depreciation charge for the year Balance at 31 August 2020 Carrying amounts At 31 August 2020 At 31 August 2019 2,517 - (200) - 2,317 (35) - - (35) 2,282 2,482 83 - - (51) 32 (79) 47 - (32) - 4 406 - - (184) 222 (380) 179 (21) (222) - 26 1,275 - - (11) 1,264 (1,183) 9 (55) (1,229) 35 92 FREEHOLD LAND & BUILDINGS US$’000 PLANT & MACHINERY US$’000 MOTOR VEHICLES US$’000 FURNITURE FIXTURES & FITTINGS US$’000 2,517 - - - 2,517 (35) - - (35) 2,482 2,482 91 - - (8) 83 (77) 7 (9) (79) 4 14 505 - - (99) 406 (417) 94 (57) (380) 26 88 1,275 - - - 1,275 (1,102) - (81) (1,183) 92 173 TOTAL US$’000 4,281 - (200) (246) 3,835 (1,677) 235 (76) (1,518) 2,317 2,604 TOTAL US$’000 4,388 - - (107) 4,281 (1,631) 101 (147) (1,677) 2,604 2,757 VALUATIONS LE HAR (PRIVATE) LIMITED – PROPERTY An external, professional and independent valuer with appropriate and recognised qualifications, Hollands Estate Agents Harare (‘Hollands’) carried out a valuation of the freehold land and buildings as at 27 January 2022, with reference to observed market evidence. The directors having considered the Hollands report consider this value to be an accurate reflection of the fair value at 31 August 2021 being US$2.3 million (2020: US$2.5 million). The Directors consider the fair value at the reporting date to not be materially different from the carrying value. 42 Notes to the Financial Statements For the year ended 31 August 2021 12. Goodwill As at 31 August 2021, the consolidated Statement of Financial Position included goodwill of US$717,000 (2020: US$717,000). Goodwill is allocated to the Group’s cash-generating units (“CGUs”), or groups of cash-generating units, that are expected to benefit from the synergies of the business combination that gave rise to the goodwill as follows: Payserv Africa Limited Total ORIGINAL COST US$’000 717 717 COST AT 1 SEPTEMBER 2020 US$’000 717 717 CARRYING VALUE AT 1 SEPTEMBER 2020 US$’000 717 717 ACCELERATED WRITE-OFF US$’000 - - CARRYING VALUE AT 31 AUGUST 2021 US$’000 717 717 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 consideration. 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 22%. The growth rate 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 was 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 exceeds the reported value thereof and that the respective book values 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. 43 Notes to the Financial Statements For the year ended 31 August 2021 13. Intangible assets ORIGINAL COST US$’000 1,538 1,538 NET BOOK VALUE AT 1 SEPTEMBER 2020 US$’000 1 1 ADDITIONS US$’000 DISPOSALS US$’000 AMORTISATION US$’000 CLOSING BALANCE AT 31 AUGUST 2021 US$’000 - - - - - - 1 1 Payserv software licenses Total AMORTISATION The amortisation charge is recognised within operating expenses (note 6) in the Statement of Profit or Loss. The Group tests other intangible assets for impairment if there are indications that they might be impaired. The amortisation periods for intangible assets are: Software licenses 3 years Investments in subsidiaries and Investments at Fair Value 14. The Company has investments in the following subsidiaries which principally affect the profits and/or net assets of the Company. The direct investments in subsidiaries held by the Company are stated at cost. These are subject to impairment testing. COUNTRY OF INCORPORATION OWNERSHIP INTEREST AF Philip & Company (Pvt) Limited African Solutions Limited Autopay (Pvt) Limited Gardoserve (Pvt) Limited Lanuarna Trust Le Har (Pvt) Limited LonZim Enterprises Limited LonZim Holdings Limited* Para Meter Computers (Pvt) Limited Paynet Zimbabwe (Pvt) Limited Payserv (Pvt) Limited Payserv Africa Limited Payserv Zimbabwe (Pvt) Limited Quintech Investments (Pvt) Limited Tradanet (Pvt) Limited Yellowwood Projects (Pvt) Limited *Held directly by Cambria Africa Plc. Zimbabwe Mauritius Zimbabwe Zimbabwe Mauritus Zimbabwe United Kingdom Isle of Man Zimbabwe Zimbabwe Zimbabwe Mauritius Zimbabwe Zimbabwe Zimbabwe Zimbabwe 2021 78.20% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 51.0% 100% 2020 78.20% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 51.0% 100% 44 Notes to the Financial Statements For the year ended 31 August 2021 14. Investments in subsidiaries and Investments at Fair Value (continued) NON-CONTROLLING INTERESTS (“NCI”) – TRADANET Ottonby Trading (Pvt) Ltd (address: Northridge Park, Northend Close, Harare, Zimbabwe) holds a 49% interest in Tradanet (Pvt) Ltd. Tradanet’s salient financial information is as follows: Profit/(Loss) 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)/generated from financing activities (including dividends) Cash and cash equivalents NON-CONTROLLING INTERESTS (“NCI”) – A F PHILIP & COMPANY 2021 US$’000 99 (112) (112) 3 62 - 72 (19) - (227) 62 2020 US$’000 (26) (26) 28 12 30 - 22 27 4 54 19 The Radar investment is held through Paynet’s 78.2% (2020: 78.2%) interest in AF Philip. AF Philip holds a 15.65% interest in Hinshaw (Pvt) Ltd (Hinshaw) which, through its wholly owned subsidiaries, holds a 79.65% interest in Radar. AF Philip is consolidated into Cambria’s Statement of Financial Position with the Radar investment reflected at a fair value of $2.23 million ($1.74 million after minority interests) translating into 35 US cents per Radar share. The factors that led to this fair value adjustment were based on negotiations with possible interested parties who offered 35 US cents to acquire a similar indirect stake in Radar. Radar is a public but unlisted company incorporated in Zimbabwe and has interests in brick manufacturing through Macdonald Bricks and is the owner of prime development land as well as a portfolio of residential properties. Constold (Pvt) Ltd (address: 4th floor, Tanganyika House, 3rd Street, Harare, Zimbabwe) holds a 21.8% (FY 2020: 21.8%) interest in AF Philip. There are no restrictions in place on any dividend that might possibly be declared by Hinshaw. AF Philip which is on level 2 of the fair value hierachy is included under the Central Segment. It’s salient financial information is as follows:- Profit attributable to NCI Dividends paid to NCI Accumulated NCI at year end Non-current assets Current assets Non-current liabilities Current liabilities Cash flow from operations Cash utilised in investing activities Cash utilised in financing activities (including dividends) Cash and cash equivalents 2021 US$’000 - - 486 2,228 - - - - - - - 2020 US$’000 - - 486 2,228 - - - - - - - 45 Notes to the Financial Statements For the year ended 31 August 2021 15. Inventory Raw materials and consumables Goods in transit Finished goods Inventories (write downs) GROUP 2021 GROUP 2020 US$’000 US$’000 158 - - 158 - 158 157 - - 157 (55) 102 During FY 2021 $40,000 in inventories were expensed in the Statement of Profit or Loss (FY 2020: $383,000). 16. Financial assets at fair value through profit or loss Quoted investments – included in non-current assets Quoted investment – included in current assets Total QUOTED INVESTMENTS PORTFOLIO: Balance at 1 September Acquired during the year Gain/(Loss) on fair valuation during the year Balance at end of the year Quoted Investments consists of: GROUP 2021 GROUP 2020 US$’000 US$’000 184 75 259 201 16 217 GROUP 2021 GROUP 2020 US$’000 US$’000 217 - 42 259 496 (134) (145) 217 Listed Old Mutual Ltd shares held by the Company at fair value of $184,000 on 31 August 2021. A portfolio of $75,000 worth of listed shares managed by an asset management company who makes all the decisions regarding the sale and purchase of these listed shares. This investment is also held at fair value with a fair value gain of $42,000 during FY 2021. The portfolio, which was purchased in ‘payment’ of a trade vendor liability which could not be settled due to Zimbabwe foreign currency constraints at the time, is callable at the option of the vendor. See note 22. 17. Trade and Other Receivables Amounts owed by Group undertakings Trade receivables Other receivables Prepayments and accrued income Total No interest is charged on receivables. GROUP 2021 US$’000 COMPANY 2021 US$’000 - 107 48 - 155 2,992 - 22 - 3,014 GROUP 2020 US$’000 - 79 72 - 151 COMPANY 2020 US$’000 3,036 - 33 - 3,069 46 Notes to the Financial Statements For the year ended 31 August 2021 17. Trade and Other Receivables (continued) The Directors consider the carrying amount of trade and other receivables as approximates of their fair value. In determining the recoverability of the trade receivable, the Group considers any change in the credit quality of trade receivables from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts. CREDIT RISK The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in the Statement of Financial Position are net of allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cashflows. The inputs and assumptions used in the measurement of possible credit losses include macro-economic conditions in Zimbabwe (e.g., GDP growth, Interest Rates, Inflation Rates), customer specific engagement on the state of their business, and weekly cash-flow and receivable analyses to serve as early indications of delays in payments. 18. Cash and cash equivalents Bank balances Cash on hand Bank overdrafts Net cash and cash equivalents in Statement of Financial Position GROUP 2021 COMPANY US$’000 1,547 109 - 1,656 2021 US$’000 160 109 - 269 GROUP 2020 US$’000 1,896 - - 1,896 COMPANY 2020 US$’000 233 - - 233 Included in cash and cash equivalents is $1.3 million which was held outside Zimbabwe at 31 August 2021. 19. Capital and reserves REVALUATION RESERVE The revaluation reserve relates to property, plant and equipment which has been revalued in the Zimbabwean subsidiaries Payserv Zimbabwe (Private) Limited and Le-Har (Private) Limited. In accordance with IAS 29, these reserves were re-allocated to retained earnings during FY 2019. FOREIGN EXCHANGE RESERVE This reserve arises on the translation of subsidiary entities where their functional currency is not United States Dollars, the presentational currency of the Group. The Company foreign exchange currency reserve relates to the translation of net assets due to a change in the functional currency of the Company from Pounds Sterling to United States Dollars as at 1 September 2011. NON-DISTRIBUTABLE RESERVE The non-distributable reserve arises on the restatement of the assets and liabilities on Dollarization in Zimbabwe. Amounts held within this reserve are ring fenced from retained earnings. Distributions can only be made from retained earnings and not from the non-distributable reserve. Amounts transferred to the non-distributable reserve are determined by the directors as necessary, unless specifically required to do so as part of any financing arrangements. 47 Notes to the Financial Statements For the year ended 31 August 2021 20. Share capital & share premium Issued and fully paid At 1 September Issued in period At 31 August NUMBER 544,575,605 - 544,575,605 ORDINARY SHARES 2021 ORDINARY SHARES 2020 SHARE CAPITAL US$’000 SHARE PREMIUM US$’000 NUMBER SHARE CAPITAL US$’000 SHARE PREMIUM US$’000 77 - 77 88,459 544,575,605 - - 88,459 544,575,605 77 - 77 88,459 - 88,459 All shares issued are classed as Ordinary Shares with a par value of 0.01 pence each and are all ranked equally. There are no other classes of shares in issue. No warrants were granted during the current financial year and no warrants are outstanding. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. The Directors are authorised in any period between consecutive annual general meetings, or consecutive 12-month periods, to allot any number of ordinary shares on such terms as they shall, in their discretion, determine up to such maximum number as represents 50 per cent of the issued share capital at the beginning of such period. Further ordinary shares may also be allotted on terms determined by the Directors but subject to the pre-emption rights prescribed by Section 36 of the Isle of Man Companies Act 2006. SHARE PREMIUM The share premium represents the value of the premium arising on shares issued as follows: 16 July 2018 190,736,593 ordinary shares at a price of 1.0p per share (US$ 2,706,084) 22 February 2017 140,918,606 ordinary shares at a price of 1.0p per share (US$ 1,736,223). 17 April 2015 6 March 2014 4 March 2014 107,000,000 ordinary shares at a price of 0.85p per share (US$1,337,000). 4,133,333 ordinary shares at a price of 7.5p per share (US$508,000). 28,272,806 ordinary shares at a price of 7.5p per share (US$3,475,000 of which US$719,000 related to settlement 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$68,659,000). 48 Notes to the Financial Statements For the year ended 31 August 2021 21. Share options All share options issued in prior years have now expired and were not exercised. 22. Loans and borrowings – long term Other trade payables Total GROUP 2021 US$’000 90 90 COMPANY 2021 US$’000 - - GROUP 2020 US$’000 22 22 COMPANY 2020 US$’000 - - Other non-current trade payables are in respect of historic Paywell software license fees within the Payserv Group. A portion of this which could not be remitted due to Zimbabwean foreign currency constraints at the time, was invested in a portfolio of quoted shares, currently valued at $75,000 as disclosed in note 16. 23. Provisions Provisions Total GROUP 2021 US$’000 - - COMPANY 2021 US$’000 - - GROUP 2020 US$’000 1 1 COMPANY 2020 US$’000 - - Provisions at 31 August 2020 were in respect of the maximum Leave Pay and Retirement Gratuities which may become payable by individual companies to employees on termination of their employment. There were no provisions in the current year. 24. Deferred tax liability RECOGNISED DEFERRED LIABILITY The following are the major deferred tax liabilities recognised by the Group and movements thereon during the current year. GROUP At 1 September Recognised directly in reserves Other movements At 31 August 2021 ACCELERATED TAX DEPRECIATION US$’000 193 - (4) 189 2020 ACCELERATED TAX DEPRECIATION US$’000 204 - (11) 193 TOTAL US$’000 193 - (4) 189 TOTAL US$’000 204 - (11) 193 Deferred tax assets off set against deferred tax liabilities in the period were US$ nil (2020: US$ nil). 49 Notes to the Financial Statements For the year ended 31 August 2021 25. Loans and borrowings – short term VAL Bridging Loan CABS Loan – short term portion Total GROUP 2021 US$’000 101 - 101 COMPANY 2021 US$’000 101 - 101 GROUP 2020 US$’000 500 9 509 COMPANY 2020 US$’000 500 - 500 The VAL Bridging Facility is owed to Ventures Africa Ltd (VAL), the majority shareholder of the Company and the ultimate beneficial owner of which is Mr Samir Shasha, the CEO of the Company. It carries interest of 10% per annum and is to be settled as soon as alternative funding becomes available to Payserv and/or its subsidiaries, with early repayment, at the election of VAL should a significant liquidity event occur. $400,000 of the VAL Loan has been repaid in the current financial year. The CABS loan was fully repaid in the current year. 26. Trade and other payables Trade payables Non-trade payables and accrued expenses Total Current tax liability Total GROUP 2021 US$’000 COMPANY 2021 US$’000 GROUP 2020 US$’000 COMPANY 2020 US$’000 210 - 210 107 317 84 1,587 1,671 - 1,671 56 178 234 38 272 33 1,109 1,142 - 1,142 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 as approximates to their fair value. Non-trade payables in the Company financial statements relate to intercompany payables to Payserv Africa Limited ($1.47 million), Paynet Zimbabwe ($65,000), Millchem Zimbabwe ($49,000) and Le Har ($3,000). 50 Notes to the Financial Statements For the year ended 31 August 2021 27. Notes to the statement of cash flows – Consolidated & Company Profit/(Loss) for the year Adjusted for: Amortisation of intangible assets Depreciation of property, plant and equipment Profit on sale of property, plant and equipment Profit on marketable securities Valuation adjustments to inventories, receivables and other assets Finance income Finance costs (Decrease) in provisions Income tax charge Operating cash flows before movements in working capital (Increase)/ Decrease in inventories Decrease in trade and other receivables Increase / (Decrease) in trade and other payables Cash generated from operations (Loss) for the year Adjusted for: Finance costs Profit / (Loss) on marketable securities Valuation adjustments to inventories, receivables and other assets Operating cash flows before movements in working capital Decrease in trade and other receivables Increase/(Decrease) in trade and other payables Cash generated from/(utilized in) operations GROUP 2021 US$’000 181 GROUP 2020 US$’000 (470) 1 50 (97) 54 - - 22 (1) 95 305 (56) (4) (43) 202 1 147 (31) (94) 464 (1) 60 (7) 46 115 184 330 (24) 605 COMPANY US$’000 (164) COMPANY US$’000 (437) 21 15 - (128) 169 416 457 47 (96) 145 (339) 26 (137) (450) 51 Notes to the Financial Statements For the year ended 31 August 2021 28. Financial instruments The Group has exposure to the following risks from its use of financial instruments: credit risk liquidity risk a. b. c. 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 processes 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. CREDIT RISK MANAGEMENT Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings of its counter-parties are regularly monitored and the aggregate value of transactions concluded is spread amongst approved counter-parties. Based on historical patterns, the Group considers a financial asset to be in default when the borrower/debtor is unlikely to pay its credit obligations to the Group in full, evidenced by: • • • the borrower/debtor not fulfilling its commitments in terms of its agreed upon terms and conditions either in relation to its initial contract or its subsequent payment arrangement with the Group; the borrower/debtor not responding to the Group’s letters of demand for payment; and outstanding amounts subsequently handed over to legal. Trade receivables consist of a large number of customers and spread across diverse industries. 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 counterparties 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. 52 Notes to the Financial Statements For the year ended 31 August 2021 28. Financial instruments (continued) 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 investments, is shown in the table below. Cash and cash equivalents Trade and other receivables Amounts owed by group undertakings Other investments Total NOTE 18 17 17 16 GROUP 2021 US$’000 1,656 155 - 259 2,070 COMPANY 2021 US$’000 269 22 2,992 184 3,467 GROUP 2020 US$’000 1,896 151 - 217 2,264 The maximum exposure to credit risk for financial assets at the reporting date by geographic region was: United Kingdom Zimbabwe Mauritius Total GROUP 2021 US$’000 568 382 1,120 2,070 COMPANY 2021 US$’000 291 3,176 - 3,467 GROUP 2020 US$’000 481 222 1,561 2,264 COMPANY 2020 US$’000 233 33 3,036 201 3,503 COMPANY 2020 US$’000 266 3,237 - 3,503 The maximum exposure to credit risk for trade and other receivables at the reporting date by type of counter-party was: Trade customers and other receivables Amounts owed by Group undertakings Total GROUP 2021 US$’000 155 - 155 COMPANY 2021 US$’000 22 2,878 2,900 GROUP 2020 US$’000 151 - 151 The ageing of trade and other receivables at the reporting date was as follows: 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 2021 US$’000 IMPAIRMENT IM 2021 US$’000 92 15 1 2 - 48 158 - - (1) (2) - - (3) COMPANY 2020 US$’000 33 3,036 3,069 TOTAL 2021 US$’000 92 15 - - - 48 155 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. 53 Notes to the Financial Statements For the year ended 31 August 2021 28. Financial instruments (continued) 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 other financial assets. 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 board manages 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. The following are the contractual, undiscounted maturities of financial liabilities, including estimated interest payments and excluding the effect of netting arrangements: GROUP CONTRACTUAL CASH FLOWS 2021 CONTRACTUAL CASH FLOWS 2020 Trade and other payables Loans and borrowings Total CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 2 TO <5 YEARS US$’000 CARRYING AMOUNT US$’000 405 101 506 315 101 416 90 - 90 294 509 803 1 YEAR OR LESS US$’000 272 564 836 COMPANY CONTRACTUAL CASH FLOWS 2021 CONTRACTUAL CASH FLOWS 2020 Trade and other payables Loans and borrowings Total CARRYING AMOUNT US$’000 1,671 101 1,772 1 YEAR OR LESS US$’000 1,671 101 1,772 2 TO <5 YEARS US$’000 - - - CARRYING AMOUNT US$’000 1,142 500 1,642 1 YEAR OR LESS US$’000 1,142 550 1,692 2 TO <5 YEARS US$’000 22 - 22 2 TO <5 YEARS US$’000 - - - 54 Notes to the Financial Statements For the year ended 31 August 2021 28. Financial instruments (continued) 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 currency giving rise to this risk is primarily the Zimbabwe Dollar (ZWL), since its adoption as the functional currency in the Zimbabwe entities since 22 February 2019, and to a lesser extend Pound Sterling in which some of the Group’s central overheads are denominated. 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, and actively monitors the exchange rate market to ensure the net equity in its Statement of Financial Position is preserved as much as possible. The following significant exchange rates applied during the year: Zimbabwe Dollar (ZWL) Pounds Sterling (GBP) Euro (EUR) South African Rand ( ZAR) AVERAGE RATE 2021 REPORTING DATE SPOT RATE 2021 AVERAGE RATE 2020 REPORTING DATE SPOT RATE 2020 26.5568 0.7388 0.8443 15.0115 85.094 0.7341 0.8793 14.7918 26.5568 0.7842 0.8943 16.1325 83.3994 0.7492 0.8386 16.7554 The Group does not account for any fixed rate financial assets or liabilities at fair value through profit or loss. At the reporting 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 2021 US$’000 2020 US$’000 - (101) (101) 1,656 - - 1,656 - (509) (509) 1,896 - 1,896 55 Notes to the Financial Statements For the year ended 31 August 2021 28. Financial instruments (continued) SENSITIVITY ANALYSIS In managing foreign currency risks the Group aims to reduce the impact of short and long-term fluctuations on the Group’s earnings. A 10 percent strengthening/weakening of the listed currencies against the USD at 31 August 2021 would have increased / (decreased) 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 Legacy Debt’s registered with the RBZ at ZWL1.00:USD1:00 which would help to absorb the impact of movements in the ZWL. It also ignores the possible impact on forecast sales and purchases. 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 2021 Zimbabwe Dollar (ZWL)* Pounds Sterling (GBP) 31 AUGUST 2020 Zimbabwe Dollar (ZWL)* Pounds Sterling (GBP) EXPOSURE IN STATEMENT OF FINANCIAL POSITION STRENGTHENING CURRENCY WEAKENING CURRENCY US$’000 US$’000 US$’000 38 13 (9) 13 4 1 (1) 1 (3) (1) 1 (1) * Excluding the impact of Legacy Debt’s registered with the RBZ at ZWL1.00:USD1.00 which acts as a hedge against currency fluctuations. INTEREST RATE RISK MANAGEMENT The Company does not believe it faces significant risk from its interest rate exposure. Currently the Company has only one lender, Ventures Africa Limited, which holds 69.2% of the Company’s equity. As a related party, Ventures Africa Limited has established interest rates at the same levels which its funding was used to displace former lenders and maintained parity with rates which the Company has been able to obtain funding at in Zimbabwe. However, Ventures Africa Limited does not charge the Company establishment fees or anniversary fees. Ventures Africa Limited 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. 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 monitors the level of dividends to ordinary shareholders. 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. 56 Notes to the Financial Statements For the year ended 31 August 2021 28. Financial instruments (continued) FAIR VALUES The fair values of financial assets and liabilities, together with the carrying amounts shown in the Statement of Financial Position are as follows: GROUP Cash and cash equivalents Trade and other receivables Quoted investment portfolio Investment Property Investment at Fair Value (Hinshaw (Radar)) Trade and other payables Loans and borrowings Total GROUP Cash and cash equivalents Trade and other receivables Quoted investment portfolio Investment Property Investment at Fair Value (Hinshaw (Radar)) Trade and other payables Loans and borrowings Total COMPANY Cash and cash equivalents Trade and other receivables Quoted investment portfolio Trade and other payables Loans and borrowings Total COMPANY Cash and cash equivalents Trade and other receivables Quoted investments portfolio Trade and other payables Loans and borrowings Total HIERARCHY Level 3 Level 3 Level 1 Level 2 Level 2 Level 3 Level 3 HIERARCHY Level 3 Level 3 Level 1 Level 2 Level 2 Level 3 Level 3 HIERARCHY Level 3 Level 3 Level 1 Level 3 Level 3 HIERARCHY Level 3 Level 3 Level 1 Level 3 Level 3 CARRYING AMOUNT 2021 US$’000 FAIR VALUE 2021 US$’000 1,656 155 259 2,300 2,228 (210) (101) 6,287 1,656 155 259 2,300 2,228 (210) (101) 6,287 CARRYING AMOUNT 2020 US$’000 FAIR VALUE 2020 US$’000 1,896 151 217 2,500 2,228 (294) (509) 6,189 1,896 151 217 2,500 2,228 (294) (509) 6,189 CARRYING AMOUNT 2021 US$’000 FAIR VALUE 2021 US$’000 269 3,014 184 (1,554) (101) 1,695 CARRYING AMOUNT 2020 US$’000 233 3,069 201 (1,142) (500) 1,861 269 2,900 182 (1,554) (101) 1,696 FAIR VALUE 2020 US$’000 233 3,069 201 (1,142) (500) 1,861 57 Notes to the Financial Statements For the year ended 31 August 2021 28. Financial instruments (continued) THE FAIR VALUE OF ASSETS AND LIABILITIES CAN BE CLASSED IN THREE LEVELS. Level 1 Fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 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). Level 3 Fair values measured using inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs). ESTIMATION OF FAIR VALUES The following, read with note 4, summarises the major methods and assumptions used in estimating the fair values of financial instruments reflected in the above tables. 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. 29. Leases LEASES AS LESSEE At the reporting date, the Group had short term leases renewable over a period of 12 months. For these leases the Group recognised the lease payments as an operating lease over the term of the lease in line with IFRS 16. During the year ended 31 August 2021, US$34,000 (2020: US$27,000) was recognised as an expense in the Statement of Profit or Loss in respect of operating leases and rentals are fixed for the period. Operating lease commitments Payable in next 12 months Payable in 1 to 5 years Payable thereafter (> 5 years) Total 30. Capital commitments The capital commitments at 31 August 2021 were US$ nil (2020: US$ nil). 31. Contingent liabilities The Group had no outstanding contingent liabilities at the end of the period. US$’000 34 - - 34 58 Notes to the Financial Statements For the year ended 31 August 2021 32. Related parties IDENTITY OF RELATED PARTIES The Group has a related party relationship with its subsidiaries (see note 14) 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 No amounts were due to Directors at 31 August 2021 in respect of Directors fees or otherwise, nor had any Directors fees been paid in the year under review. Ventures Africa Limited is the controlling shareholder of Cambria with a 69.2% interest as at 31 August 2021. Mr. Samir Shasha is the ultimate beneficial owner of Ventures Africa Limited and the CEO and Director of Cambria. VAL has provided loan funding to Cambria in the form of the Ventures Africa Limited Bridging Facility as set out in note 25. Interest accrued during the period amounted to US$22,000 in respect of the Ventures Africa Limited Bridging Facility. TRANSACTIONS WITH SUBSIDIARY ENTITIES WITHIN THE GROUP Paynet Zimbabwe (Private) Limited (“Paynet”), a 100% subsidiary of the Group, did not provide any services to fellow subsidiaries in the current year. Paynet rents its offices in Mount Pleasant, Harare from Le-Har (Pvt) Ltd, a 100% subsidiary of the Group. The lease rentals for the year amounted to $15,000 (2020: $11,000). Paynet was not charged management fees in 2021 (2020: nil) by the holding company, Cambria. Payserv Africa Limited did not charge license fees to Paynet for the use of its Transwitch software as the services were discontinued (2020: nil) and African Solutions Limited charges Paynet payroll license fees which amounted to $2,100 (2020: $5,700). TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL Key management personnel are the holding Company Directors and executive officers. None of the current active directors received any remuneration during the financial year. 59 Corporate Information For the year ended 31 August 2021 REGISTERED OFFICE AND AGENT Alta Fiduciaries Burleigh Manor Peel Road Douglas Isle of Man IM1 5EP Tel: +44 (0) 1624 626586 NOMINATED ADVISOR AND JOINT BROKER WH Ireland Limited 24 Martin Lane London England EC4R 0DR Tel: +44 (0) 207 220 1666 AUDITORS Baker Tilly Isle of Man LLC 2a Lord Street Douglas Isle of Man IM1 2BD T: +44 (0) 1624 693900 REGISTRARS Neville Registrars Limited Neville House, Steelpark Road Halesowen England B62 8HD Tel: +44 (0) 12 1585 1131 PRINCIPAL GROUP BANKERS Barclays Bank 4th Floor Barclays House Victoria Street Douglas Isle of Man IM1 2LF Tel: +44 (0) 16 2468 4684 60 Shareholder Information For the year ended 31 August 2021 ANALYSIS OF ORDINARY SHAREHOLDINGS AS AT 21 MARCH 2022 Note: the shareholding analysis has been performed on 21 March 2022 incorporating changes since the year end of 31 August 2021. 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 REGISTRARS NUMBER OF HOLDERS % OF TOTAL HOLDERS NUMBER OF SHARES % OF TOTAL SHARES 79 91 170 43 41 40 37 8 1 46.47% 53.53% 100.00% 25.29% 24.12% 23.53% 21.76% 4.71% 0.59% 20,320,877 524,254,728 544,575,605 76,198 812,704 8,547,092 64,933,552 93,206,059 377,000,000 3.73% 96.27% 100.00% 0.01% 0.15% 1.57% 11.92% 17.12% 69.23% 170 100.00% 544,575,605 100.00% 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. 61 Cambria Africa Plc, Burleigh Manor, Peel Road, Douglas, Isle of Man IM1 5EP (Registration Number: 001773V) Tel: +44 (0) 203 287 8814 info@cambriaafrica.com www.cambriaafrica.com 62 

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